What an algorithmic straitjacket! The Paris Bourse (-0.5%) has been literally locked in between 7,550 and 7,580 since 9 o'clock this morning, but has fallen marginally in the wake of the luxury sector (LVMH -1.2%, Hermès -1.6% and Kering -2.3%).

As is often the case in the final weeks of the year, trading volumes collapsed (E1.3bn traded in 8 hours) as the market paused after the 7-week straight-line rebound since the end of October.

Wall Street began the January trading session slightly higher, and the S&P500 (+0.4% to 4.735) recorded its 20th session without a -0.5% retracement, while the Nasdaq gained +0.3% on the momentum of the previous 7 weeks.

'After setting a new record close at 7,596.9 points, logic would suggest that the CAC 40 should experience some profit-taking this week', says Christopher Dembik, Investment Strategy Consultant at Pictet AM.

The context is propitious: there are no meetings of the major central banks, few statistics apart from inflation figures in the eurozone and the UK, and lower volumes due to the approach of the festive season", explains the analyst.

While the week could provide investors with an opportunity to make their final portfolio adjustments before the end of the financial year, they should also be keen to preserve the exceptional gains made in recent weeks, and over the course of 2023 in general.

Since January 1, the CAC 40 has posted a gain of around 17%, its fourth best annual performance in ten years.... the CAC40 'GR' including dividends exceeds +21% (score on the evening of December 15 for the '4 Witches' session).

Wall Street is not to be outdone, with annual gains currently reaching over 12% for the Dow Jones, almost 13% for the S&P 500 and some 52.5% for the Nasdaq-100 (+0.4% to 16.695, less than 1% off its all-time high).

The recent turbulent weeks on the markets may therefore have set the stage for the famous "end-of-year rally", especially now that the Fed has made its change of strategy ("pivot") official.

However, this phenomenon tends to materialize in the last five sessions of the year that is ending and the first two of the one that is beginning.

On the economic front, disappointment this morning with the IFO index: German business sentiment fell from 87.2 to 86.4 in December, against all expectations.

On the contrary, the consensus was for an increase to 87.8.
This does not support Bunds, which are down +6pts to 2.0730%, OATs +6.2pts to 2.6050% and Italian BTPs +3.3pts to 3.7600%.

Otherwise, it's going to be a quiet week, culminating in the US household income and spending figures on Thursday (which include the Fed's closely watched PCE inflation index).

In news from French companies, Renault Group announces the completion of the transaction announced on June 26, involving Otro Capital's investment of 200 million euros in the capital of Alpine Racing Ltd, in the form of a 24% stake.

Eiffage announces that it has won, in a consortium with eight architectural firms, the contract awarded by Société du Grand Paris for the design and construction of a section of line 15 East of the Grand Paris Express. The total value of the section between the Bobigny-Pablo Picasso and Champigny Centre stations is 2.54 billion euros.

Airbus reports that Qantas has taken delivery of its first new-generation A220, making the Australian airline the 20th operator to receive the new aircraft. It will leave the Mirabel assembly line in the next few days for Sydney.


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