Posted on December 29, 2023 at 12:49 pmUpdated December 29, 2023 at 2:48 p.m
Last day of road wins? European markets are headed there this Friday, for the final session of 2023. The rise in stocks is not very significant, but it is enough to illustrate the good performance of the markets throughout the year, while strong headwinds. March or even geopolitical tensions.
At mid-session, the Cac 40 gained 0.29% to 7,556.7 points on a ghostly trading volume of €300 million. The first session of 2023 on Monday 2 January kicked off a lavish year. Cac 40 gained 1.87% that day. Since then, the flagship index has posted an increase of nearly 17% over 2023. Its third best score since 2014.
Europe’s Stoxx 600 gained 0.3%, bringing its year-to-date gain to 13%, and more broadly, the MSCI All Country World rose around 20%. ” The idea that major central banks have certainly done enough to contain inflationary rises in 2022-2023 is supporting the rally ”, commented Brian Barish, Chief Investment Officer of Cambiar Investors LLC. “ It’s not hard to imagine new market concerns such as the US election, a significant need for US federal government bond financing and/or any rebound in inflation. However, there is not much news and many sellers yet “.
The arrangement of the planets in 2024 unlikely
On Wall Street, the flagship S&P 500 continues to push to new highs. Futures contracts predict its increase by only three points, while it would need at least 35 points to reach the absolute peak. The S&P 500 is up 24.6% in 2023, the Dow Jones is up 13.8%, and in another box, the Nasdaq Composite is up 44.2%, its best annual performance since 2003. The AI craze, which strengthened the world This performance explains the technologies that dominate the “Magnificent 7” such as Nvidia.
The celebratory atmosphere in recent months is also supported by the cessation of interest rate increases by central banks, which, according to the market, should turn into easing in the first or second quarter of 2024. But can the US central bank meet the high expectations of the market, which is counting on six rate cuts next year, without being twisted by the economic recession? ” For the markets to continue to grow, we need an alignment of the planets, which is highly unlikely.” judge Vincent Mortier of Amundi, quoted by the Financial Times. If the Fed loosens policy at the start of the year, “he will make a big mistake” according to him. “Assume inflation is no longer a problem (…) can lead to repeating past mistakes “. Also quite pessimistic Ipek Ozkardeskaya, an analyst at Swissquote, expects an investor hangover and a period of correction after the relentless two-month recovery.
Japan shines and China remains in the shadows
In Asia, the Nikkei posted the region’s biggest annual gain, climbing 28%, the first for the Japanese index since 2013, when Haruhiko Kuroda took over as governor of the Bank of Japan and began easing.
Conversely, the CSI of the Shanghai and Shenzhen stock exchanges fell 11.4% in 2023, the third year in a row of decline, on the back of a slow economic recovery after Covid. This Friday, the index strengthened by 0.5%.
On the business side, French luxury giants feature in the Cac 40 this Friday: Kering, Hermès and LVMH rose between 0.5% and 0.8%.
While LVMH and Hermès were up during the year, neither is among the big winners in the Cac 40. The biggest growth in 2023 was carmaker Stellantis.
Medtech Carmat is up 8.5% after announcing software improvements that will boost the safety profile of the Aeson artificial heart, which it designs, manufactures and markets for heart transplants.