CAC40: more indecisive, W-Street disappoints, $ falls -0.7%.

(CercleFinance.com) - The CAC40 is trading within narrow limits on the eve of the US presidential election.


The CAC40, initially up 0.4% at 7440 (thanks to the beginnings of rate easing) is now down -0.4% (at 7.380) as Wall Street reopened mixed, even dominated by heaviness (Dow Jones down -0.2%, S&P500 directionless, Nasdaq -0.1% and Nasdaq-100 making a foray below 20,000pts.
US T-Bond yields eased by -8.5pts to 4.278%, the '2-year' by -7pts to 4.134%.
Unrelated to the 0.8% decline in August compared with the previous month (revised from the initial estimate of -0.2%), US factory orders contracted by a further 0.5% in September, according to the Commerce Department.

U.S. industrial shipments fell by 0.4% in September compared with the previous month. Finally, with inventories down by 0.2%, the inventory-to-delivery ratio remained unchanged at 1.46 month-on-month.
In Europe, Bunds and OATs eased by -2.5pts and -3.5pts respectively, to 2.38% and 3.125%.

The day was marked above all by a sharp fall in the dollar (-0.6% to 103.65 for the '$-Index', while the euro climbed +0.7% to 1.0910), while polls showed a clear upturn for Kamala Harris (despite Joe Biden's recent communication errors and the poor performances of stars who came to support the Democratic candidate).

Note that the US - and therefore the Democratic administration - has increased its deficit by $620 billion in 5 weeks (and by +9.7% in Q3 compared with 2023), a pace not seen since the Second World War: this too may have weighed on the Dollar.

'Neither candidate has announced any intention of reducing the federal budget deficit. In an economy already exceeding its potential, this could cause excess demand and pressure on prices', Oddo BHF pointed out last week.

'It is universally accepted that this risk would be greater if Donald Trump is elected and implements his program (higher tariffs, limiting migratory flows)', the research firm warned, however.

Another highlight of the week will be the Bank of England and Federal Reserve monetary policy decisions on Thursday, with the US central bank widely expected to cut rates by 25 basis points.

Weaker-than-expected job creation could prompt the Fed to follow up this cut," said Mahmoud Alkudsi, senior market analyst at ADSS, on Friday, following the poor employment report for October.

This news could overshadow the week's statistics, such as the PMI activity indices, or publications from companies like Bouygues, Crédit Agricole and Veolia in Paris, or DHL, Ahold Delhaize and IAG elsewhere in Europe.

The HCOB PMI buyers' index for French manufacturing, produced by S&P Global, stood at 44.5 in October, relatively stable compared with September (44.6), but continuing to signal a sharp deterioration in the sector's economic situation.

Meanwhile, Schneider Electric's Board of Directors has appointed Olivier Blum as Chief Executive Officer, with immediate effect, after terminating Peter Herweck's appointment due to disagreements in the implementation of his roadmap.

Bureau Veritas has reached an agreement to acquire the Australian APP Group, a strategic transaction that will strengthen its presence in the Asia-Pacific region and extend its capabilities in infrastructure projects.

Engie announces that it has won a 100 MW installed capacity Battery Energy Storage System (BESS) project from electricity grid operator Elia, in the fourth auction of the Capacity Remuneration Mechanism (CRM) in Belgium.

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