CAC40: up, helped by the momentum of the luxury goods sector

(CercleFinance.com) - The Paris Bourse ended the session up 0.
76% at 7,425 points, buoyed by the luxury goods sector (with +4.1% for Kering, +3.1% for Hermès and +2.6% for LVMH), while Wall Street continued to rise, with +1.2% for the Nasdaq and +0.6% for the S&P500.

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, regardless of the fact that rates have been breaking records since the beginning of July.

Trump's election is only creating a positive electroshock for US companies.... while the political situation in Europe is likely to create uncertainty, with the break-up of the coalition government in Germany and the divorce between Chancellor Olaf Scholz and his economy minister, the orthodox Lindner.

However, the Frankfurt stock exchange (+1.8%) 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. Lindner was opposed. Lindner was opposed to this.

Today is also a day for 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 hinting that further cuts would be made at a more moderate pace', recalled Oddo BHF at the start of the week, deeming 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. It is this independence, however, that helps anchor inflation expectations at a low level", noted the research firm.

As expected, the Bank of England 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 the 2% mark in September.

In terms of statistics, US non-farm productivity rose by 2.2% annualized in the third quarter of 2024, according to the Labor Department's first estimate, reflecting a 3.5% increase in total output on 1.2% more hours worked.

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

In other news, the Labor Department announced that 221,000 new jobless claims were registered in the US last week, up by 3,000 on the week of October 28, whose 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.

In Europe, between August and September, the volume of seasonally-adjusted retail sales rose by 0.5% in the eurozone and by 0.3% in the EU, according to Eurostat, following increases of 1.1% and 0.9% respectively in August.

In Germany, industrial production in volume terms fell by 2.5% in September 2024 compared with the previous month, according to Destatis CVS-CJO data, following an increase of 2.6% in August (revised from a provisional estimate of +2.9%).

Rates are tightening severely in Europe, with +3.6Pts on Bunds at 2.435% and +4Pts on our OATs at 3.1980%.
US T-Bonds are finally easing a little, with -7pts on the 10-year at 4.362%.

The euro has rallied sharply (+0.6% to $1.0785/E), while the $-Index has fallen symmetrically by -0.7% to 104.35.
The ounce of gold is hovering around $2,695, while oil remains little changed at $75 (-0.1%).


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