CAC 40: in the red despite the records on Wall Street – archyde

(CercleFinance.com) – The Paris Bourse should start the session on a note of caution Wednesday morning, despite the new all-time highs established the day before on Wall Street.

Around 8:15 am, the ‘future’ contract on the CAC 40 index – delivery November – fell 8.5 points to 6,753.5 points, signaling a slight decline in the opening.

Records continued to rain yesterday in New York, although the main indexes only closed with marginal gains and a long way from their daily highs, set after a promising start to the day.

The economic indicators of the day, however, brought a new burst of optimism as consumer confidence rose again in October, according to the monthly Conference Board survey.

The markets were also supported by good corporate earnings releases, a trend confirmed after the close by the better than expected performance of Alphabet and Microsoft.

Of the 41 components of the S&P 500 that disclosed their accounts yesterday, 33 have done better than expected, according to calculations by Deutsche Bank.

Also according to the German bank, 84% of S&P companies have exceeded expectations since the start of the earnings season.

‘This contributes to the upward revision of the earnings outlook, which, in an equity market which has barely improved since the start of the summer, automatically leads to lower valuations,’ explains Enguerrand Artaz, at La Financière de the Chessboard.

For the manager, these good surprises restore some attractiveness to growth stocks which had become very expensive.

Well helped by Wall Street, the Parisian market had granted an increase of 0.8% yesterday, a score which allows it to confirm the erasure of the resistance of 6765 points.

But investors will probably have to wait for the ECB meeting, scheduled for tomorrow, or even the release of the latest euro zone inflation figures scheduled for Friday, to see a real underlying trend emerge.

In addition, the US Federal Reserve will hold its strategic committee next week, which could be an opportunity for Jerome Powell to formalize the ‘tapering’ (reduction of asset redemptions) long awaited by the markets.

The latest remarks from the Fed chairman have highlighted a growing fear that inflation will move beyond the Fed’s targets.

‘This could then push the institution to tighten its monetary policy earlier than expected,’ warns Vincent Boy, analyst at IG.

In the meantime, the agenda promises to be relatively light today, the only important meeting being the publication at 2:30 p.m. of durable goods orders in the United States.