CAC40: misses last step, 7,350 support threatened

(CercleFinance.com) - The CAC40 sank sharply (-1.
5% to 7,320pts) in the last trading session of October: the 7,350 support level is under threat, and there are 90 minutes left to preserve it.

It could be said that the stock markets "missed the last step", since the day before, the Nasdaq had just set a new all-time record at 18,785.
The following day, this same index fell back by -2.2% to 18,210 - and the S&P500 dropped -1.5%.
There were no unpleasant surprises, however, on the US index front: the PCE inflation gauge - closely watched by the Fed - came out 0.2 points down on August, at 2.1% on a gross basis, but stable at 2.7% on an underlying basis (excluding energy and food).

The Commerce Department, which publishes these figures, also reports that US household spending rose by 0.5% in September compared with the previous month, while incomes rose by 0.3%... again, this is in line with the consensus, and consumption remains very robust (there is talk of a "wealth effect" sustained by Wall Street).

The last "stat" is of minor importance: the Labor Department announced that it had recorded a drop of -12.000 new jobless claims in the United States - to 216,000 - last week.

The four-week moving average - more representative of the underlying trend - stood at 236,500 for the week of October 26, down 2,250 on the previous week, an insignificant difference which in no way explains Wall Street's depressed mood.

The explanation for Wall Street's heaviness must therefore be sought in the fixed-income markets, with yields tightening by +6pts on the US '10-yr' to 4.327%, +4.5pts on the '2-yr' to 4.20% (the worst score since August 1), while the '30-yr' is back above 4.500%.

The day was also marked by the publication of flash inflation estimates for the month just ended, first in France at the start of the session, then - and above all - in the eurozone.

Over one year, according to Insee's provisional estimate at the end of the month, consumer prices in France are set to rise by 1.2% in October 2024, a slight increase on the 1.1% annual rate recorded in September.

Annual inflation in the eurozone is estimated at 2% in October 2024, up from 1.7% the previous month, according to a flash estimate published by Eurostat, the European Union's statistical office.

'Due to a low basis of comparison, the inflation rate will recover. It had fallen to 1.7% year-on-year in September and could return to around 2%. For its part, underlying inflation should continue to erode', indicated Oddo BHF for the euro zone.

Our OATs deteriorated by +6.5pts to 3.1800%, Bunds by +5.8pts to 2.433%, and Italian BTPs by +10pts to 3.725%.
The Euro/$ pair remained stable at 1.0860, while oil rebounded by 0.3% to $73.3 in London.

In addition to these indicators, Thursday's session was once again dominated by corporate publications, such as that of Société Générale, which saw its group share of net income multiply by 4.6 in the third quarter.

Other heavyweights to have released their quarterly results since yesterday evening include TotalEnergies (-3%), BNP Paribas (-5%), offset by Sté Générale at +10.5%, Airbus, AXA, STMicro, as well as TF1, Ubisoft, Imerys and Spie (-6.5%).

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