CAC40: Rise weakens, rates tighten after US ISM report

(CercleFinance.com) - After jumping 2.
2% yesterday, the Paris Bourse added a further +0.6% to post a 2-session gain of +2.8%, one of the best bullish sequences since mid-September (the annual score reached +1.5%, which is quite unexpected given the economic situation and political uncertainties).

The CAC40 erased the 7,480 resistance level, then approached 7,500 points, supported in particular by URW (+2%), then the inevitable Schneider (+1.5%) and Sanofi.
No impetus will come from Wall Street (by 5:35 p.m.), which is closed on this January 7 (a day of commemoration in honor of Jimmy Carter, who died at the age of 100), but everything seems to have come to a head with the publication of a 'good' annual inflation rate in the eurozone: it is estimated - as expected - at 2.4% in December 2024, compared with 2.2% in November, according to a flash estimate published by Eurostat, the European Union's statistical office.

As for the main components of inflation in the eurozone, services should see the highest annual rate in December (4.0%, compared with 3.9% in November), followed by food, alcohol & tobacco (2.7%, stable compared with November), industrial goods excluding energy (0.5%, compared with 0.6% in November) and energy (0.1%, compared with -2.0% in November).

Meanwhile, in November 2024, the eurozone's seasonally-adjusted unemployment rate was 6.3%, stable compared with the rate recorded in October 2024 and down from 6.5% in November 2023.

The EU unemployment rate was 5.9% in November 2024, also stable compared with the rate recorded in October 2024 and down on the 6.1% recorded in November 2023.

Across the Atlantic, although Wall Street will remain closed, investors took note of the US trade deficit: it increased to $78.2 billion in November, compared with the previous month's $73.6 billion (which was slightly revised from an initial estimate of $73.8 billion), according to the Commerce Department.

This 6.2% month-on-month increase in the deficit resulted from a 3.4% surge in US imports of goods and services, to $351.6 billion, outstripping a 2.7% increase in exports, to $273.4 billion.

Another closely watched figure in the US is the growth in US service sector activity, which accelerated more than expected in December, shows the monthly Institute for Supply Management (ISM) survey released on Tuesday.

The ISM services index rose to 54.1 from 52.1 the previous month, while economists were on average expecting a figure of 53.5.
The indicator rose above the 50-point threshold, marking the 52nd time in 55 months that activity has grown since the recovery from the Covid epidemic that began in June 2020.

The sub-index measuring activity in the tertiary sector climbed to 58.2 from 53.7 in November, while that for new contracts improved to 54.2 from 53.7 the previous month.

The employment index eased to 51.4 from 51.5 in November, while prices paid accelerated to 64.4 from 58.2.

The euro has reversed course against the greenback since the publication of the ISM: it has fallen from $1.042/E to 1.0370, i.e. -0.15% to -0.2%.
On the bond front, after a very fine session the previous day, our OATs erased their gains with +4pts to 3.3040%, Bunds posted +3pts to 2.478%, and British Gilts continued to sink into the crisis: nothing is going right with a 10-year yield above 4.7350%, the worst score in 25 years (in fact since 1998).

On the oil markets, Brent crude prices climbed +% to $77 a barrel.

In French company news, Spie announces the appointment of Evert Lemmen as Managing Director of Spie Nederland and, as such, member of the Group Executive Committee, effective February 1, 2025, succeeding Lieve Declercq.

EDF announces the success of its senior multi-tranche bond issue for a nominal amount of $1.9 billion, enabling it to finance its strategy and its objective of contributing to achieving carbon neutrality by 2050.


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