CAC40: up slightly as US inflation awaits

(CercleFinance.com) - The Paris stock market gained nearly 0.
3% this morning, around 7,250 points, helped by Air Liquide (+2%) and Teleperformance (+1.8%), in a context of caution ahead of the publication of the latest US inflation data.

Yesterday, the Paris market continued its yo-yo movement, shedding 2.7% to 7,226 points, confirming its current sequence of underperformance in relation to the US stock markets, which are racking up record after record.

Since the election of Donald Trump, European equities have clearly been losing out to their American counterparts, with the gap widening since the start of the week.

To illustrate the phenomenon, the Euro STOXX 50 fell by more than 2.2% in the wake of the 15% plunge in chemical giant Bayer, the victim of disappointing results.

While the pan-European index has now validated a clear break of the 4,800-point threshold, the VSTOXX barometer measuring its volatility remains relatively contained, remaining below the 18-point level.

"This suggests that markets are not worried about growth prospects, but rather adapting to a new reality", say Danske Bank analysts.

Under these conditions, investors will be turning their attention in the coming days to economic indicators to determine whether the current differential between Europe and the United States is justified in practice.

All eyes will turn this afternoon to the publication of US consumer prices for October, which are expected to accelerate to a rise of 2.6%, after 2.4% in September.

Underlying core inflation, which is closely watched, is expected to remain at 3.3% y/y.

This statistic could reinforce - or weaken - the scenario of a 25 basis point rate cut in December, an assumption now considered by only 62% of traders according to the CME's FedWatch tool.

Investors know that a solid economy - accompanied by a resurgence in inflation - would force the Fed to make fewer rate cuts than expected just before the presidential election.

Meanwhile, in the third quarter of 2024, the number of unemployed in France (excluding Mayotte) as defined by the International Labour Office (ILO) rose by 35,000 on the previous quarter, to 2.3 million people, according to Insee.

On the bond front, US T-Bonds are trading at 4.41%, while Bunds of the same maturity are at 2.36%.

In French company news, Interparfums expects sales to reach €910 to €930 million, and operating margin to exceed 19% again in 2025, a year which will also see the creation of its own Solférino brand.

On Wednesday, Thales announced the renewal of its maintenance and repair contract with Eastern Airlines Technic (EASTEC), the overhaul subsidiary of Chinese airline China Eastern.

Finally, Medidata, the life sciences subsidiary of Dassault Systèmes, announced on Tuesday evening that it had sealed a new agreement with Bioforum, a research organization dedicated to clinical trials.

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