The Parisian CAC has been bullish on Monday, as we see an attempt to turn the overall selling around. In this index, it seems like semiconductors and banks are leading the way.
CAC 40
The Parisian index rallied quite nicely during the session on Monday, up about 1% as Paris is starting to head home after a strong session with plenty of buying out there. This could be the start of buying in this index.
European technology shares are rallying right along with U.S. and Asian chipmakers. Lower oil prices have been easing some of the fear about energy inflation and perhaps cooling the temperature on an ECB rate hike. That being said, banks are the biggest beneficiaries of the higher-interest-rate environment, and luxury shares are lagging just a little bit, although not horribly.
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Société Générale is up 4%, and STMicroelectronics is up 3%, so these are fairly divergent asset classes. The market has bounced off the €8,100 level, and now we have to ask questions whether or not the ECB tightening policy is going to cause some issues, or whether traders are going to bet on actual growth.
ECB expectations and more
The biggest thing right now, though, is going to be Middle East developments, oil prices, and ECB rate expectations. We do have a Christine Lagarde speech and Eurozone consumer confidence coming out tomorrow, French flash manufacturing and services PMI numbers coming out on Wednesday, and on Thursday we have French business and consumer confidence.
Cautiously bullish is the phrase I would use to describe this market. Short-term pullbacks open up the possibility of buying, as long as we can stay above the crucial €8,000 level. This is the overall “floor” in the market from what I can see at the moment.
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