CAC40: a string of new all-time highs in Europe

(CercleFinance.com) - Stock market indexes start the week slightly up: it may not seem like much, but the CAC40 'Global Return' smashes a new all-time record above 25,600Pts.

The DAX40 soars above 22,700 (+1.000Pts in 6 sessions, +95% in 2 years and 4 months), the Euro-Stoxx50 with +0.4% to 5,515 is well on its way to recording its best ever close.

And all this on the heels of a week in which the E-Stoxx50 gained almost 3% and the Nasdaq +2.5%.
On Friday, the NASDAQ-100 (+0.4%) set a new all-time record at 22,139, while the S&P500 retraced its all-time high of 6,128.
Wall Street will remain closed today in observance of Washington's Birthday.

Like their European counterparts, French equities have started the year in good shape, buoyed by the prospect of a recovery in growth, the uncertainty surrounding the implementation of new US tariffs and now the hope of a peace agreement in Ukraine.

While investors have so far adopted a 'no news, good news' approach to Donald Trump's policies, trade risks remain very much present, analysts warn, and the threat of new tariffs still represents a potential 'sword of Damocles' weighing on the evolution of world stock markets.

The week that opens today will bring other obstacles, starting with the 'flash' PMI activity indices for Europe.

"While the dynamic remains contrasted between a contracting manufacturing sector and a rather resilient services sector, we anticipate a recovery in the eurozone economy favored by the easing of financing conditions", explain Neuflize OBC's teams.

The private bank explains that most of the conditions for a return to European equities are "gradually" taking shape.

"These favorable developments for Europe should enable investors to reconsider the valuation differential between the US and European markets", judges Olivier Raingeard, its investment director.

In an encouraging sign, Goldman Sachs strategists decided last Friday to raise their targets for the major pan-European indices, the STOXX Europe 600 and the Euro STOXX 50.

In the United States, markets will be focused primarily on the publication of the minutes of the Fed's latest monetary policy meeting, due out on Wednesday.

While the earnings season is now drawing to a close, the results of US retail giant Walmart, scheduled for Thursday, will provide further information on the health of consumer spending in the country.

The German elections, scheduled for February 23, could also prompt the markets to adopt a cautious stance.

We consider a coalition government between the CDU/CSU and the SPD, or between the CDU/CSU, the SPD and the Greens, with Friedrich Merz as the new Chancellor, to be the two most likely options", predicts J. Safra Sarasin.Safra Sarasin.

'That said, the need to form a coalition will considerably limit the scope for substantial political change', warns the Swiss bank.

Nvidia's results, expected on Wednesday February 26 on Wall Street, will finally be the final key for the markets to confirm the positive momentum of the past few weeks.

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