CAC40: solid rise in the wake of Wall Street

(CercleFinance.com) - The CAC40 ended the session with a gain of 0.
84%, at 7,640 points, close to its high for the day, well helped by STMicro (+2.9%) and Dassault Systèmes (+2.7%) in particular.

Yesterday evening's publication of Nvidia's accounts, which mixed good and bad surprises, turned into a "non-event" for Wall Street. On the other hand, the US indices advanced with +0.7% for the S&P500 and Dow Jones and +1.1% for the Nasdaq.

Processor manufacturer Nvidia disappointed by unveiling less spectacular figures than usual, even though its quarterly sales and earnings exceeded analysts' expectations.

'The stairway was high. But Nvidia didn't disappoint", says Christopher Dembik, investment strategist at Pictet AM.

Strategists at Danske Bank point out that the company's prospects are promising, but also note that its performance failed to "impress" investors.

Profit-taking in electronic trading pushed the stock down by more than 7% in after-hours trading in New York, but it limited its decline to -2.8%, holding above $122 and preserving its $3,000 billion capi.

Following this contrasting publication, investors will no doubt try to determine whether the record highs set on Wall Street in recent days and the current valuation levels are justified.

A series of indicators were on the agenda today on both sides of the Atlantic.
In the United States, gross domestic product (GDP) was revised to an annualized rate of 3% in the second quarter of 2024 by the Commerce Department, which had announced 2.8% in its first reading a month ago.

This growth, a sharp acceleration on the 1.4% recorded in the previous quarter, is mainly attributable to the rise in consumer spending (+2.9%, mainly on credit), followed by investment in private inventories.

But what Wall Street is welcoming is the good PCE price index, which came in at +2.5% over the period, compared with an increase of +3.4% in the first quarter. Excluding food and energy prices, the index was down from +3.7% to +2.8% quarter-on-quarter.

The Labor Department announced that 231,000 new U.S. jobless claims were registered in the week to August 19, down by 2,000 on the previous week (which was revised upwards from 232,000 to 233,000).

Finally, US house prices climbed by 5.4% year-on-year in June to set a new all-time record, despite a fall in transactions.

The Case-Shiller house price index has risen by 51% over the past 4 years, which is more than the +49% observed during the subprime bubble of 2002 to 2006 (zero interest rate effect, followed by the search for safe-haven assets in the face of inflation).
The Case-Shiller index of the 20 largest cities also jumped by 6.5% year-on-year in June, setting a new all-time record: real estate is reaching stratospheric heights in California (hundreds of thousands of Americans have left the state this year).

Bond markets are not rejoicing at the good US and German inflation indices: the US 10-year is down +4pts to 3.883%, the 2-year +3pts to 3.897%.
In Europe, the Bund gained +2.3 basis points to 2.2790%, our OATs +1.6 basis points to 2.998%, and Italian BTPs +2.2 basis points to 3.666%.

In the news for French companies, Pernod Ricard reported a 35% drop in net income, group share (RNPG) to just under 1.48 billion euros for its 2023-24 financial year, and a 7% drop in profit from recurring operations (ROC) to almost 3.12 billion euros (+1.5% organic).

This is 'a solid performance in an uncertain economic and geopolitical environment, marked by the normalization of the spirits market after two years of exceptional post-Covid growth', commented CEO Alexandre Ricard.

Wendel announces that its subsidiary Stahl has agreed to acquire Weilburger Graphics GmbH, a leading German manufacturer of water-based and UV varnishes for the graphic arts and packaging industries.

Finally, TotalEnergies announces the launch of a pilot project to install a floating wind turbine that will supply renewable electricity to the Culzean offshore platform in Scotland, paving the way for an innovative decarbonization model.


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