CAC40: Mixed start for luxury

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On Tuesday 19 January, on the eve of Joe Biden’s inauguration at the White House and during the speech of the future Treasury Secretary Janet Yellen before the American senators, the CAC 40 closed with a drop of 0.33%, falling below 5,600 points. However, this morning the Parisian index posted a slight rise at the opening with 5,615.41 points. For their part, luxury stocks are following the trend.


For several weeks now, the CAC 40 has been experiencing mixed results and has shown a certain stagnation by not moving either downwards or upwards. Having started the week with a rise of 0.10%, the CAC 40 nevertheless ended up going back into negative territory yesterday evening by retroceding 0.3% to 5598.6 points. 


The luxury sector is also swept away by this wind of mistrust: Kering lost 2.68% to 547.90 euros, LVMH 1.72% to 491.05 euros and Hermès 2.84% to 862.40 euros.


In the end, the CAC40 posted a slight rise at the opening this morning, above the 5,600 points it remained close to at the close yesterday, but the trend remains fragile.


LVMH passed the 500-point mark at around 9:30 am, Kering rose slightly with 555 points, as did Hermès with 873 points at the same time.


Even though January is supposed to be a buoyant month for the financial markets, investors are sceptical and remain on their guard with regard to the health crisis above all, but also with regard to the various global political contexts.


Indeed, the economic and political situation in the United States is at the forefront this week, starting with the hearing of Janet Yellen last night and the oath to be taken today by Joe Biden to officially become the 46th President of the United States. 


Investors seem to want to remain on the defensive before he takes office. They are particularly afraid of his stimulus policy, which, in their view, could encourage deficits, which would subsequently lead to an increase in debt, higher interest rates and tax hikes


Janet Yellen’s statements came as no surprise, as she defended the new $1.9 trillion budget support plan proposed by Joe Biden, arguing that it was necessary to “strike hard” in the face of the coronavirus pandemic. It is necessary to invest in infrastructure, R&D, training and not to be afraid of debt since interest rates are very low.


“Neither the President-elect nor I propose this aid plan without taking into account the debt burden of this country. But right now, with interest rates at historic lows, the smartest thing we can do is to hit hard,” she said.


Investors also remain attentive to political developments in Rome as Prime Minister Giuseppe Conte faces two days of parliamentary votes that will decide whether his fragile coalition can hold on to power. He won a vote of confidence in the upper house Senate on Tuesday, ensuring he remains in power after a second-tier partner left his coalition last week.


Let us recall that the 5600-5700 points zone is a key zone for the CAC 40 these last months, within this zone nothing is certain, above this zone the financial markets can put aside their worries. 


The upside potential of the Parisian index therefore appears limited in the short term.



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The editorial team
Thanks to its extensive knowledge of these sectors, the Luxus + editorial team deciphers for its readers the main economic and technological stakes in fashion, watchmaking, jewelry, gastronomy, perfumes and cosmetics, hotels, and prestigious real estate.

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