The Paris Stock Exchange should open very slightly higher on Wednesday morning, with the Trump effect tending to fade on the markets as investors prepare for a new wave of results.
Around 8:15 a.m., the ‘futures’ contract on the CAC 40 index – February delivery – nibbles 6.5 points to 7,800 points, suggesting a continuation of the favorable trend of recent days.
Reassured by the absence of spectacular announcements regarding the implementation of new customs duties in the United States – which benefited the luxury sector – the Parisian market had lined up a sixth consecutive session of increase on Tuesday by granting itself an increase by 0.5% to 7770 points
The optimism generated by the return of Donald Trump to the White House has also revitalized Wall Street, which returned yesterday in the direction of its records reached in December.
By increasing by 1.2% on Tuesday, the Dow Jones once again rose above the 44,000 point mark, while the S&P 500 confirmed its return beyond 6,000 points by gaining almost 0 .9%.
If investors are betting a lot on the tax cuts and deregulation measures promised by the new president, a certain vagueness continues to surround the concrete implementation of his trade policy.
‘Clarity, on this point, remains quite difficult to grasp’, deplores Michael Brown, strategist at Pepperstone, while emphasizing that the worst possible scenario, namely the imposition of so-called ‘universal’ customs duties, seems to ‘instant can be dismissed.
The fact remains that ‘Trumponomics’ and the decisions that the real estate magnate makes in terms of commercial policy will be decisive for developments in the markets over the coming months.
If its announcements were to prove heavier than expected, the ensuing volatility could well create turmoil in the financial markets.
‘The new administration, however, has every interest in fueling the upward trajectory of the stock markets, especially since Trump has made the Dow’s performance his own yardstick for measuring his success’, Michael Brown, at Pepperstone.
As such, the wave of quarterly company results expected in the days and weeks to come should undoubtedly dictate the trend on Wall Street.
While the major American banks published rather encouraging results last week, the markets are waiting for the continuation of the program in order to be able to assess the health of the S&P 500 companies.
-Last night, Netflix reported the best quarter in its history in terms of subscribers and expressed its intention to continue its price increases, which earned it gains of more than 14% in pre-stock market quotations.
Among the results expected today, those of other large, more traditional groups, including Johnson & Johnson and Procter & Gamble, will give a more precise picture of the state of the economy.
Investors are mainly counting on the results of big technology heavyweights like Apple, Meta and Microsoft – expected next week – in order to restart the bullish machine of the sector.
Their performance will be carefully examined and must be there to justify valuations currently considered high.
In the bond sector, long rates are easing a little while Donald Trump’s inauguration speech did not contain precise indications concerning the imposition of new customs duties.
The yield on the ten-year German Bund eases marginally towards 2.49% while that of the OAT with the same maturity falls by 2.5 basis points to 3.27%, which causes the spread to fall again. France/Germany below 80 points.
The vagueness maintained by Donald Trump on trade issues also relieves the bond market with the yield on ten-year Treasuries falling by four basis points to 4.57%.
After its recent rebound which allowed it to return above $1.04, the euro stabilized this morning in the area of 1.0415 against the greenback.
On the oil side, prices are falling again, the ‘state of energy emergency’ decreed on Monday by the American president being synonymous with more oil production and therefore potential pressure on futures prices.
The barrel of Brent (-0.3% to 79 dollars) continues to suffer profit taking after its recent peak at more than 80 dollars and American light crude (West Texas Intermediate, WTI) drops 0.5% to 75, 5 dollars.
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