The Paris stock market (+0.6%) continues its bullish rally with a 6th session of gains now exceeding +6.6% (i.e. +1.1% on average per day since January 2).
This is by far the best start to a stock market year in the 21st century, surpassing the +6% recorded at the beginning of 2009.
At 6,903, the CAC40 has reached in 1 week the target set for the end of a "very dangerous" 2023.
And the more skepticism there is about the foundations of such a rise, the higher it goes!
European markets (+0.5%) are now supported by the positive opening of Wall Street (+0.5% after +2.5% on Friday).

Investors want to believe that the first month of the year generally sets the general trend on equity markets.

According to calculations by S&P Dow Jones Indices, when the S&P 500 index rises in January, it rises for the year as a whole in over 71% of cases.

This theorem was largely confirmed last year, when the S&P fell by 5% in the first month of the year before ending the 2022 financial year down by just over 19%.

Similarly, analysts point out that it is extremely rare for a year of stock market correction to be followed by another year in the red, leading strategists to predict a rather favorable 2023 stock market year.

For Danske Bank analysts, the year looks 'interesting' in view of the contradictory forces currently tugging at the financial markets.

The easing of inflation, the slight improvement in visibility, the reopening of the Chinese economy and unused liquidity are all likely to reduce the risk premium and support equities", they assert in their latest weekly update.

On the other hand, the prospect of a recession, the continuing restrictive policies of central banks and the pressure on corporate profits still militate in favor of a cautious stance", the Danish bank moderates.

US asset manager Raymond James also predicts a rise in stock markets in 2023, although it warns that the road ahead will be "full of pitfalls".

Volatility will undoubtedly persist, and bottoming before markets recover is likely to take time in the current environment", warns Mike Gibbs, head of his equity portfolio and technical strategy.

"With this in mind, we recommend that investors be patient and pragmatic, i.e. use bouts of weakness to strengthen (from a long-term perspective), and not chase any rallies that may come their way", he adds.

A certain feverishness could emerge over the next few days, leading up to the week's big event on the American side, namely the monthly consumer price index (CPI) statistics published this Thursday.

Investors are hoping for a further slowdown in inflation in the USA, which reached 7.1% in November, its lowest level in almost a year.

In Germany, industrial production rebounded slightly by 0.2% month-on-month in November, driven by consumer goods after its 0.4% decline in October, according to data from Destatis, the Federal Statistical Office.
In Europe, the 'Sentix' index of business sentiment rose from -21 to -17, while energy prices eased.
The rise in stock market indices seems to be penalizing the bond compartment ('risk-off') a little, as yields are easing by +6pts on our OATs to 2.778%, and by +5pts on Bunds to 2.255%... but US T-Bonds remain virtually stable at 3.58% (+0.5Pt).

In company news, Dassault Systèmes announces that the governance structure it unveiled on April 27 will come into effect today, making its founder Charles Edelstenne Honorary Chairman of the company, in addition to his continuing role as director.

CGG announces the start-up of a new 3D seismic reprocessing project in the Foz do Amazonas basin in Brazil's equatorial margin, scheduled for completion by the end of 2023, with first images as early as June.

On Monday, Stellantis announced the signature of an agreement with Australia's Element 25 for the supply of manganese sulfate for its electric vehicle batteries.
Finally, Vinci announces that Omexom ENR Sud-Ouest (VINCI Energies), in a consortium with SBIPB and Profil du Futur (ArcelorMittal), will build a 4.6 MWp photovoltaic plant for EDF Renouvelables in La Réunion.


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