(News Bulletin 247) – The Paris Stock Exchange should start almost at equilibrium on Tuesday morning against a backdrop of rotation towards cyclicals at the expense of the most defensive stocks on the stock exchange.

Around 8:15 am, the ‘future’ contract on the CAC 40 index – delivery at the end of March – fell 13 points to 7292.5 points, suggesting a note of weakness at the opening.

The Parisian market had ended Monday’s session with a gain of 1.5%, to 7295 points, a performance which enabled it to erase a good part of the heavy decline suffered on Friday (-1.8%).

The sectors most dependent on economic cycles returned to favor yesterday, to the detriment of health care, utilities and consumer staples.

“This type of rotation corresponds to what we expect to observe when the markets anticipate a pause in the monetary tightening operated by the major central banks”, recall the analysts of Danske Bank.

“This is also in line with our strategy, as we believe central bank tightening is largely behind us now,” the Danish bank added.

The New York Stock Exchange also started the week with a session of modest growth, also supported by the sectors most sensitive to the economy.

Stocks linked to non-essential consumption, industry and technology thus supported the Dow and the Nasdaq, which rose 0.2% and 0.6% respectively at the final bell.

The question that now arises for investors is whether the pause movement of the past few weeks was only temporary or if it is likely to be prolonged.

If the recovery of the day before suggests to a certain extent a renewed optimism on growth, the recent procrastination of the market testifies to a certain fatigue after the sharp rise at the beginning of the year.

For the past few weeks, expectations for the Fed’s final rate have steadily increased to now stand at nearly 5.4%, compared to only 5% last month.

In this context, investors will be watching closely the statistics expected today, starting with the consumer price figures in France, which could well show an acceleration of inflation in February.

If energy inflation seems to have passed its peak, this is not the case for the other components of the statistics.

The US consumer confidence index, published by the Conference Board, is expected to rise this afternoon, illustrating the resilience of household morale in the United States.

The next sessions therefore promise to be decisive: the ACC can either continue its recovery beyond 7300 points, or resume its consolidation towards 7150 points.

According to the chartists, such a configuration would not fail to lead the flagship index to its former supports of 7105, then 7050 points.

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