CAC40: boosted by luxury goods with its biggest ever rise

(CercleFinance.com) - The Paris Bourse soared +2.
3% to 7,730 on the back of hysterical bullishness in the luxury goods sector (+9% thanks to a second stimulus package for the Chinese economy), which could today post the biggest rise in history (LVMH and Kering +11%, Hermès +9%, L'Oréal +7%, i.e. more than 500 billion in 'capi' added in just a few hours). As a result, the CAC40 returned to positive territory for the month of September.
Luxury goods also boosted the E-Stoxx50, which surpassed the +2% mark.

Since its annual low on August 6, the CAC has rallied by more than 8.5%, reflecting optimism not only about interest-rate trends, but also about a soft landing for the economy in the months ahead. For the week as a whole, the Paris index is now up +3.1%.
On Wall Street, the rise was more measured, but the S&P500 set its 43rd all-time record.
Optimism was fuelled by US GDP, which grew at an annualized rate of 3% in the second quarter of 2024, according to the Commerce Department's third estimate, in line with its second reading a month ago.

This growth, a sharp acceleration on the 1.6% seen in the previous quarter, was mainly attributable to higher consumer spending, private inventory investment and business investment.

In addition, the PCE price inflation index was confirmed at +2.5% unadjusted and +2.8% excluding food and energy prices, levels significantly down on those observed in the previous quarter.
Against all expectations, the number of jobless claims fell last week in the USA, suggesting that the market is not easing as quickly as expected.

The number fell by 4,000 to 218,000 in the week to September 21, according to the Labor Department, whereas economists were expecting it to rise to around 225,000.

Durable goods orders in the US were flat in August, according to the Commerce Department.

Inflation fears have eased recently after several reassuring statistics, but could resurface in the event of a nasty surprise.

In addition, Fed Chairman Jerome Powell will speak this afternoon about economic conditions at a conference organized by the Federal Reserve Bank of New York.

On the bond market, the yield on 10-year US government bonds edged up +4pts back above 3.82%, which according to some observers shows that traders fear that the Fed has struck "too fast and too hard".

The German Bund with the same maturity, the benchmark rate for the eurozone, is easing slightly (-1Pt) to around 2.178%.
Our OATs are down +0.5Pt to 2.98%, i.e. 2.5Pts more than the Spanish 10-year with 'Bonos' 2.955%.

On the currency front, the dollar is attempting to rebound towards 1.1150 against the euro after testing a new low above 1.12 yesterday.

Despite China's double stimulus plan, oil plummets -2.8% to $71.6 in London, and US light crude (West Texas Intermediate, WTI) loses 2.5% to $68.3, falling back below its much-watched $70 support.

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