Friday morning is expected to see a slight rise in the Paris Stock Exchange, bolstered by decreasing inflation concerns in the U.S. The CAC 40 index futures have gained 16 points, indicating a potential fourth consecutive day of increases. The index closed Thursday at 7634 points, supported by the luxury sector’s performance. In contrast, U.S. markets face renewed inflation fears, impacting tech stocks. Investors await key economic data, while oil prices continue to rise, nearing last summer’s highs.
Positive Outlook for the Paris Stock Exchange
The Paris Stock Exchange is anticipated to kick off the day with a slight rise on Friday morning, further enhancing its positive performance for the week. This optimism is largely fueled by a reduction in inflation concerns in the United States.
As of 8:15 AM, the futures contract for the CAC 40 index, set to expire in January, has increased by 16 points, reaching 7650.5. This indicates the potential for the index to mark its fourth consecutive session of gains.
On Thursday, the Paris market closed with a robust gain of 2.1%, positioning the index at 7634 points, and surpassing the significant 7600-point mark for the first time since October of the previous year. The uptrend was notably supported by a rally in the luxury sector, thanks to positive results from Richemont, alongside lower-than-anticipated consumer price figures in the U.S. for December. This data has bolstered expectations for further interest rate cuts by the Federal Reserve.
Market Trends and Economic Indicators
Unless a drastic shift occurs, the CAC 40 is projected to see a weekly increase of approximately 2.7%. The recent bullish momentum has lifted the Paris index by over 3.4% since the start of the year.
In stark contrast, U.S. stock markets are struggling to sustain upward trends early in the year, a departure from the consistent positive trajectory observed in previous months. Wall Street has been impacted by renewed inflation fears following the latest import price data, which revealed a year-on-year increase of 2.2% in December—the highest figure recorded in two years. Consequently, the Dow Jones fell by 0.2%, and the Nasdaq dropped by 0.9%, reflecting a decline in interest for technology stocks after their significant rise earlier this year.
Futures for major New York indices suggest a modest opening for Wall Street, with an anticipated increase of around 0.1% on Friday.
On the economic front, investors are keenly awaiting the final consumer price figures for December in the eurozone, scheduled for release at 11:00 AM. Eurostat’s preliminary estimates indicated a rise in inflation from 2.2% to 2.4% last month, primarily driven by base effects related to energy prices, which are unlikely to cause major concern for the ECB.
In the U.S., data regarding housing starts, building permits, and industrial production are also expected, but are not anticipated to significantly sway market dynamics. The most notable earnings report of the day will come at noon from the U.S. oil services company SLB.
Market participants may choose to adopt a cautious stance ahead of the official inauguration of Donald Trump as the 47th president of the United States, set for Monday. Those who initially supported Trump’s promises of tax cuts and deregulation appear to be waiting for the new administration’s initial moves before making significant investments.
As the teams at La Financière de l’Echiquier (LFDE) note, while the new president’s measures may aim to bolster the New World’s influence, potential ramifications such as tariff increases, mass deportation of immigrant workers, and severe public spending cuts could disrupt the smooth functioning of the U.S. economy.
In the bond market, the ten-year U.S. yield has stabilized around 4.60%, moving away from earlier peaks of over 4.80%. Meanwhile, the German equivalent remains steady at 2.53%, while the yield on French OATs stands at 3.35%, widening the yield gap between the two countries to 82 basis points.
Oil prices, which have surged at the start of the year, remain close to the highs seen since last summer. Brent crude is up 0.4%, trading at $81.6 per barrel, and U.S. light crude (West Texas Intermediate, WTI) has risen by 0.6%, reaching $79.2. Texas crude is on track to achieve a fourth consecutive week of gains, with weekly increases currently surpassing 3%.