Paris Stock Exchange is set for a positive start on Friday, driven by optimism after the U.S. Federal Reserve’s recent interest rate cut. The CAC 40 futures rose by 22.5 points, signaling a strong trading session ahead. The Fed’s decision to lower rates is expected to bolster market sentiment, particularly following Donald Trump’s election victory, which analysts believe will lead to favorable corporate tax policies. Investors await updates on consumer confidence later in the day amidst a robust economic backdrop.
Paris Stock Exchange Set for Positive Opening
The Paris Stock Exchange is poised to begin the day on a hopeful note this Friday morning, buoyed by increasing optimism following the recent U.S. Federal Reserve meeting, which saw another interest rate cut.
As of 8:15 AM, the futures contract for the CAC 40 index, set for November delivery, has risen by 22.5 points, reaching 7452 points, signaling a promising start to the trading session.
Implications of the Federal Reserve’s Decision
In line with expectations, the Federal Reserve lowered its key interest rate by a quarter point last night, marking the second cut in less than two months. However, they held back on revealing too many details about their future plans.
The Fed members unanimously agreed to the rate reduction, pointing to controlled inflation inching toward 2% and the necessity to mitigate risks of economic slowdown, despite acknowledging that growth is “progressing at a sustained pace.”
Michael Brown, a strategist at Pepperstone, remarked, “My baseline scenario continues to foresee a 25 basis point rate cut by the committee at the end of the next meetings until we reach a neutral rate, around 3%, by next summer.”
This decision contributed to a robust rally on Wall Street last night, where a flurry of new all-time highs was recorded, especially for the Nasdaq Composite, which is nearing the significant milestone of 20,000 points.
International markets are expected to carry forward the positive trend witnessed in recent days, particularly following Donald Trump’s victory in the U.S. presidential election. Analysts predict that this favorable sentiment on Wall Street is likely to persist, especially with expectations of more beneficial tax policies for U.S. corporations.
According to Yan Taw Boon, a manager at Neuberger Berman, “We anticipate that Trump’s second term will focus on reducing corporate taxes, deregulating the tech sector, implementing tariffs to boost the U.S. industrial sector, and adopting supportive measures for cryptocurrencies.”
Trump has indicated plans to ease regulations for the sector, and bitcoin has surged to a new peak above $76,000, with some experts predicting it could reach the 10,000-point mark soon.
The S&P 500, a key benchmark for U.S. investors, is also nearing the historic 6,000-point level, which could motivate investors to consider further upward movement in the near term.
With Wall Street’s positive response to Trump’s election and the Fed’s accommodating policies, the Paris Stock Exchange is on track for a weekly gain of just over 0.2%.
While the day is expected to be relatively quiet regarding economic indicators, investors will receive updates on the Michigan consumer confidence index later in the afternoon.
Considering the robust employment landscape, moderating inflation, and stock indices reaching record levels, it’s reasonable to anticipate that American household morale will remain strong.