CAC40: symbolic gain but record January, gold at its zenith

(CercleFinance.com) - The Paris Bourse (+0.
1%) ended the session on a slightly sluggish note, ending a turbulent week on a positive note (weekly gain of +0.6%).
The CAC40 remains above 7,950, the SBF 120 above 6,000 (for the symbol), while the Euro-Stoxx50 (+0.1%) and the DAX40 (stable) broke their 9th and 10th all-time records in 2 weeks this morning at 5,314 and 21,800 respectively.314 and 21,800 respectively this morning (i.e. +8.3% for the Euro-stoxx50 in 1 month, +9.5% for the DAX).
This January is proving to be the most bullish of the 21st century in the Eurozone, with the current uptrend catching up with the US indices after the spectacular underperformance of 2024.
An encouraging factor is the broadening of the uptrend in Europe, as all 25 sectors making up the STOXX 600 rose yesterday", point out Danske Bank's teams.
On Wall Street, the session got off to a mixed start, with the Dow Jones stable (+0.1%) but the Nasdaq jumping +1.3% to 19,900 and coming within 1.5% of its record highs, while the S&P500 (+0.7%) returned to its highs at 6,115pts, with the possibility of an all-time best close this evening, above 6,120pts.

Despite the DeepSeek shockwave, the Fed's cautious stance and the mixed results published by several US tech giants, investors are still finding a good reason to push valuations to new highs: they were reassured yesterday by the action of the European Central Bank (ECB), which lowered rates for the fourth consecutive time and opened the door to further monetary easing in the months ahead.

This 'dovish' turn is crucial if European equity markets are to regain their attractiveness", stresses Florian Ielpo, Head of Macroeconomic Research at Lombard Odier IM.

The ECB seems to be taking a further step towards a more accommodative stance (...) and this should support European assets in the medium term", says the analyst.

On the figures front, US consumer spending rose by 0.7% in December 2024 compared with the previous month, according to the Commerce Department, on the back of a 0.4% month-on-month increase in income.

Published simultaneously, the PCE price index - closely watched by the Fed - rose by 2.6% at annual rate in December, after 2.4% in November. Excluding food and energy, its annual rise remained constant at +2.8% month-on-month.
'If the core PCE index comes out above the expected consensus of 2.8% y/y, this would give the Fed further reason to postpone its rate cuts', warned Dilin Wu, strategist at Pepperstone.
US T-Bonds eased marginally by 0.51Pt to 4.5070% for the '10-yr' and the '30-yr' remained perfectly unchanged: today's PCE is therefore a non-event, which will reassure Wall Street.

Friday also saw the publication of the eagerly-awaited German inflation figures: down 0.2%, perfectly in line with expectations, Bunds eased -5.5pts to 2.453%.

Prices had slipped from 2.4% to 2.8% year-on-year in December due to an unfavorable base effect on energy prices.
In France, consumer prices are expected to rise by 1.4% year-on-year in January 2025, according to Insee, marking a slight acceleration after the +1.3% annual rate observed in December 2024.
Our OATs erase -7Pts to 3.1930% and the spread with the Bund widens slightly to 74Pts.
No movement on the FOREX with the Euro unchanged at 1.03080, while Gold sets a new all-time record at $2,815/oz ($2,850 on the April contract).

Investors' attention is also likely to be focused on the 4th quarter results season, which continues to be in full swing.

Last night, Apple reported a performance ahead of market estimates, despite the difficulties currently being experienced in China, which saw its share price rise by more than 3% in electronic trading.

Even Intel, the poor performer in American tech over the past few years, published better-than-expected accounts, raising hopes that the world's former number one chipmaker will soon turn around its business.

The current climate of caution surrounding trade policy developments could however be the trend, as Donald Trump prepares to impose 25% tariffs on imports from Canada and Mexico as early as tomorrow.


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