CAC40: boosted by another shower of all-time highs on WStreet

(CercleFinance.com) - The Paris Bourse (+1% to 7,340) was emboldened by a continuation of the bullish rally on Wall Street, with a new deluge of absolute records across the board: 43,810Pts for the Dow Jones (+0.
1%), 5,965 on the S&P500 (+0.6%) and 19,210 for the Nasdaq (+1.2%)... the 2,400 mark was broken on the Russell-2000.400 mark on the Russell-2000.
The CAC40 had reopened without a trend, despite Wall Street's biggest annual rise on Wednesday evening, which means that capital flows are still being sucked into the US markets, and never mind that rates have been breaking records since the beginning of July.
Trump's election - and his institutional grand slam in Congress - is only really creating a positive electroshock for US companies... while political news in Europe is likely to create uncertainty with the break-up of the government coalition in Germany and the divorce between Chancellor Olaf Scholz and his economy minister, the orthodox Lindner.
However, the Frankfurt stock market (+1.4%) seems to be rejoicing at the prospect of early parliamentary elections next January, which could enable a fresh start to be made... i.e. a policy of stimulating the economy (in recession for 8 quarters) through spending, to which Mr. Leidner was opposed.

The day is also dominated by monetary policy, with decisions by the Bank of England (BoE) and then the Fed this evening.

In September, the Fed cut its key rates by 50 basis points, while suggesting that further cuts would be made at a more moderate pace", recalled Oddo BHF at the start of the week, judging a 25 bp cut on Thursday to be almost certain.

The political situation is not without consequences afterwards", he stressed, pointing to a greater risk of inflationary tensions in the event - since confirmed - of Donald Trump's victory in the presidential election.

"He has often criticized Jerome Powell and does not look kindly on the Fed's independence. Yet it is this independence that helps anchor inflation expectations at a low level", noted the research department.

The Bank of England today announced a rate cut of 25 bps to 3.75%, the second this year after the one at the beginning of August, against the backdrop of British inflation falling below 2% in September.

In terms of statistics, 2 figures have just been published in the US: non-farm productivity rose by 2.2% at an annualized rate in the third quarter of 2024, according to the Labor Department's first estimate, reflecting a 3.5% rise in total output for a 1.2% increase in the number of hours worked.

This strong rise in productivity was nonetheless less than the 4.2% increase in hourly wages, a discrepancy which translated into a 1.9% increase in US non-agricultural unit labor costs for the quarter just ended.

The Labor Department reports that 221,000 new jobless claims were registered in the US last week, up by 3,000 on the week of October 28, when the level was revised from 216,000 to 218,000.

The number of people receiving regular benefits rose by 39,000 to 1,892,000 in the week to October 21, the most recent period available for this statistic.

There were also some interesting 'macro' figures from Europe: German industrial production and eurozone retail sales for September: these rose by 0.5% in the eurozone and 0.3% in the EU, according to Eurostat, following increases of 1.1% and 0.9% respectively in August.
Yields are tightening severely in Europe, with +3.6pts on Bunds at 2.435% and +4pts on our OATs at 3.1980%, and +2pts on Italian BTPs at 3.7800% (vs. 3.83% at their peak).
US T-Bonds are finally easing a little, with the '10-yr' down 7pts to 4.362%, while the '2-yr' is down 5pts to 4.218%.
The Euro rallied sharply (+0.6% to 1.0785) and the $-Index fell symmetrically by -0.7% to 104.35.
The ounce of gold rebounded by +1% to $2,700 (after a dip to $2,600 the previous day).
Oil remains little changed at $75.3 in London (+0.2%).

On the corporate quarterly publication front in Paris, investors will be able to react to those of Engie, Legrand, Veolia, Valneva and SES this morning, as well as those of Teleperformance and Bénéteau on Wednesday evening.


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