CAC40: in the red after results from US giants

(CercleFinance.com) - The Paris Bourse ended in the red, and Wall Street was no help this time: the CAC40 fell by -1.
05% to 7,522.

The Euro-Stoxx50, which had held up much better than the CAC (with a decline of barely 0.5%), fell sharply around 4:25pm, in the wake of ASML's profit warning issued in the middle of the session.... a very unusual choice).

Wall Street reopened indecisive, then turned downwards: the Nasdaq fell by -0.7% ('ASML' effect) and the S&P500 and Dow Jones were slightly down by -0.3% to -0.2%.

Results from US giants Bank of America and Johnson & Johnson were well received, but Citigroup dropped -1.6% with a -9% fall in earnings and a symmetrical rise in provisions.

A major salvo of earnings releases is expected this week, as 43 S&P 500 companies, including six Dow Jones companies, publish their accounts, among them Netflix, American Express and Procter & Gamble.

Investors are looking for pleasant surprises to reassure them of the current high valuations, in the hope of revising upwards their earnings forecasts for major US companies.

'In addition to the usual financial metrics, we'll be paying particular attention to announcements concerning share buybacks', explains Christopher Dembik, Investment Strategy Advisor at Pictet AM.

Over the past few months, this has been a massive support for equities", the analyst recalls.

"This generally induces inflation in financial assets", explains the professional.

"Structurally, everything favours a continued rise in global equities, particularly US equities", stresses Christopher Dembik.

In terms of figures, manufacturing activity contracted sharply in New York State in October.

The Empire State index of general conditions calculated by the local Fed fell by 23 points this month, to -11.9.

This figure reinforces the easing of interest rates which began this morning: T-Bonds 2034 erased -7Pts to 4.054%... but the '2-year' remained unchanged at 3.941%.

In Europe, the Bund eases by -4pts to 2.233%, our OATs by -6.8pts to 2.9700%, and the 'Bonos' by -5pts to 2.9500%.

In Europe too, the macroeconomic agenda was busy, with the ZEW index of German investor sentiment and eurozone industrial production figures published this morning.

German investor sentiment deteriorated further in October, according to the ZEW economic research institute, but their outlook is tending to improve, offering a small glimmer of hope for Europe's ailing leading economy.

The ZEW index measuring the sentiment of analysts and market participants rose from 3.6 to 13.1, an improvement of 9.5 points month-on-month.

In August 2024, compared with the previous month, seasonally-adjusted industrial production rebounded by 1.8% in the Eurozone and by 1.3% in the EU, after declining by 0.5% and 0.3% respectively in July.

Buoyed by the strength of technology stocks, the Tokyo Stock Exchange recovered more than 1.1% on Tuesday, taking it back above the 40,000 mark and posting a gain of almost 25% over the past 12 months.

On the oil market, Brent crude suffered heavy profit-taking (-1.8% to $74.8 a barrel, after -4% the previous day) as OPEC again lowered its demand forecast for 2024 and 2025.

U.S. light crude (West Texas Intermediate, WTI) is down -6% in 24 hours, at around $76/barrel.

Finally, the euro is unchanged at around $1.09050/$, while gold is up +0.2% at $2,663/Oz, less than 0.8% from its all-time high.

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