Paris Stock Exchange is poised for a slight rise, influenced by optimism from Wall Street as investors await key economic data. The CAC 40 futures indicate a gain of 12 points. Following a recent decline, US markets showed renewed risk appetite, buoyed by potential targeted trade tariffs. Analysts remain cautious about trade uncertainties and optimistic earnings forecasts. Upcoming US inflation and consumer confidence data, along with positive European PMIs, will be closely watched, while bond rates and oil prices are also on the rise.
Market Outlook: Paris Stock Exchange Set for a Positive Start
The Paris Stock Exchange is gearing up for a modest increase this Tuesday, buoyed by a wave of optimism spreading from Wall Street, as investors eagerly await crucial economic updates from both sides of the Atlantic.
As of 8:15 AM, the futures contract for the CAC 40 index is showing a rise of 12 points, reaching 8044 points. This suggests a promising start to the trading day, although fluctuations are expected to remain minimal.
Wall Street’s Influence and Economic Indicators
After a lackluster performance at the beginning of the week, where the Paris market saw a decline of nearly 0.3% to close at 8022.3 points, the optimism from New York’s market reopening appears to have gone unnoticed. However, the cautious sentiment that has characterized the US stock markets over the past month seems to be shifting, with a renewed appetite for risk emerging on Monday. This change is largely influenced by expectations surrounding the upcoming trade measures proposed by President Trump.
By the end of the trading session, the Dow Jones had increased by 1.4%, the S&P 500 by 1.8%, and the Nasdaq by 2.3%. This newfound confidence was sparked by a report from the Wall Street Journal suggesting that the ‘reciprocal’ tariffs being considered might be more targeted than initially anticipated, with potential exemptions for certain countries or sectors, such as automotive and semiconductors, a notion that the White House has not dismissed.
Despite this backdrop, analysts like Michael Brown from Pepperstone caution that uncertainties regarding trade relations are likely to persist. He notes that forecasts concerning earnings and growth appear overly optimistic, and the lack of immediate intervention from the Federal Reserve leaves the markets more susceptible to external shocks.
To gauge the sustainability of the positive trend seen on Wall Street, investors will be closely monitoring a fresh set of economic indicators. The anticipated PCE inflation figures set for release on Friday in the United States will be of particular interest, alongside today’s consumer confidence index from the Conference Board, which has recently indicated a slowdown in growth.
In Europe, following the release of better-than-expected PMIs yesterday, the focus will shift to the Ifo index in Germany, with economists predicting a positive impact from the recent establishment of a €500 billion infrastructure fund.
On the bond market front, US rates are experiencing a notable increase, influenced by the renewed risk appetite, which is pushing the yield on ten-year Treasuries above 4.33%. The dollar is strengthening, although not dramatically, allowing the euro to hold steady around 1.08 against the US currency. Meanwhile, oil prices are trending upwards, driven by speculation regarding new US tariffs on imported oil, particularly from Venezuela, with Brent crude prices holding firm above $73 per barrel and West Texas Intermediate (WTI) inching up to nearly $69.2.