The Paris stock exchange is expected to extend its recent rebound on Wednesday morning, buoyed by cautious optimism over potential peace in Ukraine and growing anticipation of a Federal Reserve rate cut in the United States next month.
As of 8:15 a.m., the "future" contract on the CAC 40 index--December delivery--was up 34 points at 8,084, signaling a positive opening in the wake of the recovery that began last Thursday.
After hovering around its equilibrium point for much of yesterday, the Paris market picked up momentum in the afternoon, ultimately gaining 0.8% and closing above the 8,000 mark--a threshold breached a week ago--finishing the session at 8,025 points.
European markets followed a similar upward trend, with the DAX advancing 0.9% by the end of trading and the Euro STOXX posting a 0.8% gain.
Investors responded positively to reports of progress on a 19-point peace plan presented by the United States, which could satisfy both Kyiv and Moscow.
After a hesitant start, Wall Street also continued its climb on Tuesday, supported by mixed economic indicators that strengthened expectations of another Federal Reserve rate cut on December 10--a scenario now deemed credible by nearly 83% of traders, according to CME's FedWatch tool.
In a reassuring sign, the S&P 500 recaptured its 50-day moving average at 6,750 points--lost a week ago--rising more than 0.9% to close at 6,766 points.
With risk appetite returning, market stress has eased and the "VIX" volatility index--often referred to as the fear gauge--fell 10% to around 18.50, dropping below the 20-point threshold and significantly calming the atmosphere.
"Once again this year, sellers find themselves on the wrong side of the markets," noted Michael Brown, strategist at Pepperstone.
"The U.S. economy remains solid, earnings growth is robust, the trade climate is easing, and monetary policy is still accommodative: a set of factors clearly driving risk assets higher," the analyst continued.
"Add to that very favorable seasonality, flows driven by fear of missing out (FOMO) at year-end, and the resumption of share buybacks, and you have an environment that would be difficult--if not unwise--to bet against at the moment," he concluded.
While investors will be watching U.S. durable goods orders at 2:30 p.m., trading volumes are expected to remain light and market moves limited ahead of Thanksgiving, a public holiday during which Wall Street will be closed.
