CAC40: back to 7800, record highs on DAX and D-Jones

(CercleFinance.com) - The Paris Bourse continues its bullish rally, with a gain of around +0.
75%, enabling the CAC40 to regain 7,800 points (i.e. +3% in 48 hours, following the previous day's strong 2.3% advance).

The CAC index posted an exceptional weekly gain of 3.8%, making it positive again both for September (+2.8%) and for the year as a whole (+3.1%).
The DAX40 (+1.3%) shattered its previous highs: at 19,500, the weekly gain exceeded +4%, for a total of +16.3% since January 1.
The Euro-Stoxx50 (+0.7% to 5,070) is back to within 0.6% of its best close of 5,100 on May 15.

On Wall Street, the US equity markets continue to set new all-time highs, with the Dow Jones (+1%) reaching a new zenith at 42,600pts, and the S&P 500 (+0.3%) expected to set its 44th annual closing record (above 5.760 if we were to end there).
The Nasdaq, on the other hand, seems more indecisive as a wave of profit-taking affects the semiconductor sector (-3% after +3.6% the previous day).

The Dow Jones stands out and seems the most 'concerned' by the announcement of confirmed growth of 3% for the US economy in the second quarter, a sign of the resilience of activity across the Atlantic.

It looks like all good news is good news for the markets at the moment", commented one London-based trader this morning.

On the stats front, the most eagerly-awaited figure of the week came from the United States: the PCE price index for August showed annual inflation down 0.3 points (as expected) on July, to 2.2% unadjusted, but up 0.1 points to 2.7% underlying (excluding energy and food).

The Commerce Department, which publishes these figures, also reports that US household spending rose by 0.2% in August compared with the previous month, while incomes rose at a similar rate.
This is -0.1% below expectations in both cases.
The savings rate, as a percentage of personal disposable income, stood at 4.8% in August.
Contrary to the Conference Board survey (in free fall in September), US consumer confidence improved significantly in September (to 70.1 from 67.9), at a faster pace than initially estimated, according to the final results of the University of Michigan's monthly survey published this Friday.

Inflation continues, but this time in Europe: this morning, investors took note of French consumer price figures. According to Insee's provisional end-of-month estimate, consumer prices in France rose by 1.2% year-on-year in September 2024, marking a clear slowdown after +1.8% the previous month.

These weaker-than-expected figures would reinforce the likelihood of a further rate cut by the ECB at its meeting scheduled for October 17.

US Treasury yields finally eased a little on Friday (-2pts to 3.775%, after briefly breaching the 3.80% threshold yesterday for the first time since the beginning of September): a rotation movement has prompted investors to turn to riskier assets since the FED cut rates by -50pts in mid-September.
The European bond market is continuing to improve: the German 10-year is down -3pts to 2.1436%, and our OATs are down -4.7.8pts to 2.928%... thus returning to parity with Spanish bonds (down -3pts to 2.9300%).

The dollar, which had reached annual lows against the euro at the start of the week, retreated below 1.1200/E this morning, trading at 1.1170 (-0.1%).

The oil market confirms its pullback after the short-lived rebound following the formalization of China's stimulus plan at the beginning of the week, as supply and demand fundamentals regain the upper hand.

Brent crude is trading at $71.5 a barrel, while US light crude (West Texas Intermediate, WTI) is stagnating at $67.6, as Saudi Arabia has reportedly abandoned its objective of bringing prices back to the $100 a barrel zone.

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