CAC40: back to 7,900, Palantir +26.5% boost for Nasdaq

(CercleFinance.com) - After dropping 1.
2% the previous day, the Paris stock market is now back up by almost 0.6% and back above 7,900pts.
Paris is outperforming other markets, which are content with +0.2% (Frankfurt) or +0.1% (Amsterdam), not to mention London (-0.3%).
The CAC40 is being driven - mainly - by Dassault Systèmes (+8%), STMicro (+2%) and BNP Paribas (+3%).

On Wall Street, the session got off to a shaky start, with the Dow Jones down -0.2% and the S&P500 up +0.2%... but the Nasdaq tipped the scales with +0.7%, led by Palantir, which soared +25.6% following the publication of results 10% ahead of expectations, representing a +54% rise in C.A over 1 year... but the share price has been multiplied by 5.5 over 1 year, and the $1 billion profit expected in 2025 fetches a hefty 200 times.
As for the 2025 sales estimated at $3.75 billion... it fetches nearly 60 times, the most stratospheric valuation in history for a company worth over $100 billion (the Cisco valuation peaks in 2000 with 60 times profits are almost laughable).

While investors are reassured that there is no risk of censure of the Bayrou government, despite a budget "that goes to no one" and a government that is the antithesis of the French vote at the beginning of July, they remain worried about the return to the forefront of the US/rest of the world trade war, and in particular its consequences for global growth.
After a session in which yields eased sharply on Monday (with the markets switching to 'risk-off'), yields eased across the board on Tuesday, with +5pts on T-Bonds to 4.5950%, +3pts on our OATs to 3.1400% and +4.5pts on Bunds to 2.4320% (note the contraction in the OAT/Bund spread to 71.5pts).

Although widely anticipated, Donald Trump's protectionist impulses over the weekend seemed to have taken the markets by surprise, as they had previously been betting on the positive impact of the New York businessman's return to the White House.

Although the initial chill following the announcement of tariff surcharges against Canada, Mexico and China faded somewhat as the session progressed, the Paris market still lost 1.2% to 7,854 points yesterday.

Mexico managed to negotiate and obtain a one-month grace period in return for the dispatch of 10,000 men to secure the border with the United States.

Washington also suspended tariffs against Canada after Prime Minister Justin Trudeau announced reinforcements at the border to curb drug trafficking, especially the smuggling of fentanyl, an opioid that is wreaking havoc across the Atlantic.

For its part, China announced on Tuesday the implementation of retaliatory measures to Donald Trump's new tariffs by imposing taxes on hydrocarbons and launching an investigation against Google.

But Chinese President Xi Jinping is scheduled to hold talks with his American counterpart later in the day, suggesting a possible softening of their respective positions.

'While some uncertainty persists, we note that the American president remains open to discussion and that he barks more than he bites', commented Danske Bank analysts.

Asian stock markets welcomed the news, as illustrated by the 0.7% rebound of Tokyo's Nikkei, while Hong Kong's Hang Seng index climbed a more substantial 2.4%.

I think traders are already beginning to tire of these trade issues and would prefer to return to the previous regime, which was based on the appreciation of economic data, growth and monetary policies, but here we are again", says Chris Weston, Pepperstone's Director of Research.

Against this backdrop, the wave of earnings releases scheduled for today is likely to take a back seat.

In Europe, a number of major stock market players, including BNP Paribas (+3%), Dassault Systèmes (+8%), Infineon, Publicis and UBS, unveiled their accounts this morning: Infineon soared by +12%, single-handedly keeping the DAX afloat.

In the US, Merck, Pfizer and Spotify will announce theirs at midday, before the much-anticipated releases from Alphabet and AMD (Nvidia's rival) scheduled for this evening after the close of Wall Street.

With the exception of Jolts job offers and industrial orders in the US, there are no major indicators on the economic agenda this Tuesday.

However, the economic calendar will accelerate over the next few days, culminating on Friday with the US employment report for January.

This busy schedule raises hopes of a scenario in which market fundamentals regain the upper hand.
Against this backdrop of uncertainty, gold, the safe-haven par excellence, appreciated by 0.7% to $2,823 an ounce, a new all-time high.

Meanwhile, North Sea Brent crude was down 0.7% at $75.

In French company news, Amundi reports net income for 2024 up 13% to €1.38 billion, showing an average annual growth rate (AAGR) of +6.1% compared with the benchmark net income for 2021 in the Ambitions 2025 plan, above its target of +5%.

Publicis announces recurring EPS up 4.9% to 7.30 euros for 2024, with a stable operating margin rate at 18%, for net income growth of 6.6% to nearly 14 billion euros (+5.8% organic).

BNP Paribas reports EPS up 8.9% to 9.57 euros for fiscal 2024, with cost of risk up slightly to three billion euros and gross operating income up 7.4% to over 18.6 billion euros.

Dassault Systèmes announces a long-term partnership with Volkswagen Group, whereby the German automaker has selected its cloud-based 3DEXPERIENCE platform as the core platform for its engineering and manufacturing activities.


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