CAC 40: caution ahead of new indicators

(CercleFinance.com) - The Paris Bourse is set to rise very slightly on Tuesday morning, after stagnating the previous day, as investors remain cautious ahead of the publication of two indicators on the US economy.


At around 8:15 a.m., the CAC 40 index futures contract - for April delivery - was trading at 8199 points, up 24 points, announcing minimal gains at the opening.

After last week's pause, which continued on Monday, the Paris market is hoping to move forward again in the next few days, thanks to economic indicators as investors like them.

These should remain in line with the 'goldilocks' scenario, i.e. reassuring on the state of growth, but not sufficiently vigorous to rule out the prospect of further rate cuts.

This afternoon, the market will take note of the durable goods orders figures, followed by the Conference Board's consumer confidence figures, which will give a first glimpse of US household morale.

Other important indicators will follow, such as the latest estimate of fourth-quarter US GDP due on Thursday, but the highlight of the week will be February's household income and expenditure statistics.

This publication, whose price component is the Federal Reserve's preferred measure of inflation, will refine forecasts for the Fed's forthcoming decisions.

The mood could nonetheless be one of pause as we approach the Easter long weekend and the end of the first quarter, which saw all the world's major stock markets hit closing records at the same time.

The recent rise in indices has rekindled doubts among some investors about the valuation levels of equities, which some analysts are describing as 'overvalued', or even consistent with the formation of a 'bubble'.

From a stock market point of view, we'll certainly need to take a breather in the short term after the significant gains of the first quarter", says Christopher Dembik, Investment Strategy Consultant at Pictet.

Since January 1, the Paris index has risen by over 8%.

"It's worth noting that the CAC 40 is almost on a par with the S&P 500 in terms of performance", continues Christopher Dembik. That's rare enough to mention," concludes the strategist.

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