CAC40: falls back to 7,550, gold to $2,679, i.e. +30% in 2024

(CercleFinance.com) - The Paris Bourse is down by around -0.
6% to -0.7%, losing half of the gains made the previous day.

With a 1.3% rise yesterday, the Paris market had proved to be the main beneficiary of the Chinese stimulus plan, which boosted the luxury goods sector, enabling it to climb back above the 7,600-point threshold in high volumes.
China's monetary stimulus has obviously triggered a wave of optimism on the stock market, given that it echoes a larger-than-expected rate cut by the US Federal Reserve last week", explains Christopher Dembik, Investment Strategy Advisor at Pictet AM.

But this wave of optimism could quickly lead to profit-taking and a brutal return to reality", warns the analyst.

This is what is happening in Europe, with the E-Stoxx50 at -0.6%, and on Wall Street, even though US indices are maintaining a slightly bullish bias: the Dow Jones is down -0.3%, the S&P500 is up 0.1% and the Nasdaq is up +0.4%.... on balance, that's very close to zero.

Opinions diverge on the direction equity markets will take, with some professionals betting on a climate favorable to risky assets thanks to the monetary easing underway, while others warn of the risk of a stock market relapse.

The day will continue to be marked by the dollar's new annual low, falling below 1.1210/E, and gold's new all-time high at $2.670/Oz.

In the US, after a 10.3% jump in July, new home sales in the USA contracted by 4.7% in August, according to the Commerce Department, to 716,000 annualized and seasonally adjusted figures.

The median price of new homes sold was $420,600, and the average price was $492,700. At 467,000, the stock of new homes ready for sale represents a 7.8-month supply at the current rate of absorption.

On a more general note, the OECD on Wednesday revised downwards its growth forecasts for the USA and the Eurozone in 2025, deeming that major risks remained surrounding a global economy in the midst of a "turning point".

In the Eurozone, growth is still expected to be 0.7% in 2024, before accelerating to 1.3% in 2025, compared with +1.5% previously.
In the United States, GDP growth should slow from 1.1% this year to 1.2% in 2025.

In the United States, GDP growth should slow, but benefit from the easing of monetary policy underway, with growth expected to reach 2.6% in 2024, then 1.6% in 2025 (instead of +1.8%).

In China, growth is expected to dip to 4.9% this year, then plateau at 4.5% in 2025, as stimulus measures are not sufficient to offset sluggish consumer demand and the massive correction in the property market.
On Friday, investors will be keeping a close eye on the release of the US Consumer Price Index (CPI), the Fed's preferred gauge of inflation.

Bond markets are continuing their downward trend of the past week: T-Bonds are up to 3.785% (+5.2pts), the yield on the ten-year German Bund is up +5.5pts to 2.1900%, its French equivalent is up +6pts to 2.966%, and Italian BTPs are up +5.2pts to 3.5300%.

Oil prices fell back -1.2% to $74.2 in London: optimism about the revival of activity in China waned, and traders seemed unconcerned by the resurgence of geopolitical tension with Israeli strikes in Lebanon against the Iranian-backed Hezbollah.

U.S. light crude (West Texas Intermediate, WTI) dropped a more significant -1.4% to $70.5 a barrel.

Buoyed by the dollar's fall and geopolitical tensions, the price of an ounce of gold is chaining record after record, rising a further 0.1% to $2.67* an ounce this morning. Its increase over the year as a whole is now approaching 30%, and 40% over 12 months.

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