The Paris Stock Exchange is expected to continue its upward trajectory this Monday, driven by optimism surrounding Donald Trump’s inauguration. The CAC 40 index has shown consistent gains, reflecting positive market sentiment despite a quiet European economic calendar. U.S. stock indices also performed well last week, and cryptocurrency, particularly Bitcoin, is gaining traction. As earnings season begins, investors are focused on anticipated results from major companies, while the U.S. dollar faces challenges from declining bond yields.
Paris Stock Exchange Poised for Continued Recovery
The Paris Stock Exchange is set to maintain its upward momentum this Monday morning, fueled by the optimism surrounding Donald Trump’s inauguration as the 47th president of the United States. Investors are keenly watching as the official ceremony takes place today.
As of 8:15 AM, the ‘future’ contract on the CAC 40 index, now expiring in February, has risen by 11.5 points to reach 7744.5 points, marking the fifth consecutive session in positive territory.
Market Trends and Economic Indicators
With American stock markets closed today in observance of Martin Luther King Day, the European economic calendar appears quiet, lacking any significant indicators that might invigorate the trading session. Nevertheless, the prevailing sentiment remains optimistic, bolstered by the belief that the incoming Trump administration will effectively leverage the current strength of the U.S. economy, which is anticipated to benefit stock markets.
In this positive environment, major U.S. indices experienced notable gains last week, with the Nasdaq rising by 2.4% and the Dow Jones climbing 3.7%. The S&P 500 also saw a weekly increase of 2.9%, drawing closer to its historical high set on December 6, just under 2% away from that milestone.
The Paris market is not lagging, as the CAC 40 surged nearly 4% last week, surpassing the 7700-point mark, and is now showing a 4.5% increase year-to-date. Meanwhile, Germany’s DAX index has reached new heights, reflecting over a 50% rise since late 2022, despite the country experiencing stagnant growth.
Investors, once wary of potential inflationary pressures from the new U.S. administration’s policies, are now optimistic about the favorable effects of proposed deregulation measures. There is particular enthusiasm surrounding the expectation of a supportive regulatory environment for cryptocurrencies, including their increased acceptance for everyday transactions.
In a testament to the excitement in the cryptocurrency sector, Bitcoin has surged recently, currently priced at $105,800, nearing its all-time high of $108,000 from last month. Some analysts predict that it could reach $120,000 in the long run.
Additionally, the newly launched ‘Trump Coin’ has generated significant buzz, attaining a valuation of several billion dollars within hours of its introduction. In the digital landscape, many observers anticipate that Trump will quickly issue a decree permitting TikTok, which was recently banned by the Supreme Court, to resume operations in the U.S. via a potential buyout or partnership.
The earnings season is ramping up in the United States, following a strong start from major banks. This week will see the release of quarterly results from heavyweight companies such as Netflix, Procter & Gamble, Johnson & Johnson, American Express, and Verizon.
In Europe, attention will turn to the PMI indices that measure private sector activity, which are scheduled for release on Friday, marking the return of significant economic data.
Despite the risk appetite stemming from Trump’s presidency, the U.S. dollar is facing headwinds, weakened by a decline in bond yields. The greenback has dipped against several major currencies, including the euro, which has climbed above 1.03.
In the bond market, the yield on ten-year Treasuries has stabilized around 4.60%, down from 4.80% just a week ago, while the German equivalent remains steady at 2.53%.
Lastly, oil prices are experiencing some profit-taking after reaching their highest levels in four months last week. Following new U.S. sanctions against Russia, North Sea Brent crude has decreased by 0.4% to below $80.5, with West Texas Intermediate crude down 0.3% to $77.7.