The CAC 40 never stops setting records. On Tuesday, it reached a new historic high above 7,600 points on the stock market. Something to rejoice investors, even if the index only progresses moderately in the immediate future.
Heavyweight LVMH boosts the CAC 40
It is undoubtedly the LVMH group which is pulling the CAC 40 up on the stock market. On Friday, the world number one luxury company reported historic results for 2022, with sales exceeding 79 billion euros.
LVMH shares soared by more than 12% that day, taking with it the CAC 40 which broke its closing record. With its 385 billion capitalization, LVMH weighs more than 10% in the calculation of the index. Each jolt of the title therefore has a tenfold impact on the entire rating.
On Tuesday, the momentum given by the luxury juggernaut continued to carry the CAC 40. Even if LVMH stagnated slightly in the first exchanges, the memory of its record results was enough to maintain the upward momentum.
Interest rates on the stock market soon to fall?
But LVMH doesn’t explain everything. For several days, the investors bet also on a possible deceleration of monetary tightening by central banks in 2023. Several members of the ECB have mentioned a slowdown in rate increases, perhaps as early as March.
A pleasing prospect for the stock market. Lower interest rates would boost the economy and business results. Same story in the United States, where the Fed begins its monetary policy meeting this Tuesday. Market participants are watching for the slightest sign of a pivot towards a less aggressive position in the coming months.
Caution before the GAFAM results
However, certain elements encourage caution. Stock markets are feverishly awaiting publications from American tech giants in the coming days. The accounts of Alphabet, Microsoft, Apple, Amazon and Meta for the last quarter of 2022 are particularly scrutinized.
The slightest disappointment on their part could dampen market enthusiasm. Furthermore, the euro zone’s sluggish growth, expected at -0.1% for the October-December quarter, is a reminder that the economy is going through a difficult time.
Buoyed by the LVMH juggernaut and expectations of falling interest rates, the CAC 40 of the Paris stock exchange reached a new historic high on Tuesday. A reason for satisfaction for investors, even if certain points of attention such as the upcoming GAFAM publications encourage caution. Whatever the case, this new record confirms the dynamism of the Parisian coast at the start of 2024.
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