CAC40: preserves 7,300, but beware of US interest rates and debt

(CercleFinance.com) - The Paris stock market has fallen by between -0.
2% and -0.5% since this morning, around 7,300 points, driven by Teleperformance (+2.4%) and Edenred (+3.5%), but weighed down by Sanofi (-4.2%) and Capgemini (-3.1%).
Over the past week, the CAC40 lost -0.7%, and over the month of November (which ends at 4pm), the loss was close to -3%, while US indices rose symmetrically on Thursday evening, before losing ground again on Friday: -0.5% on the Dow, -0.8% on the S&P and -1.4% on the Nasdaq (weighed down by Applied Materials with -8.2%, Illumina -4.2%, Nvidia -2.1%).

Wall Street was not helped by the latest US industrial production figures, which showed a sequential decline of 0.5% in September (revised from -0.3% in the initial estimate).

The Fed, which publishes these figures, explains that the strike at "a major civil aircraft manufacturer" (i.e. Boeing) reduced industrial production by around 0.2% in October, and that the effects of two hurricanes also subtracted around 0.1%.
Without this, production would have remained unchanged, and Jerome Powell has been rather optimistic (since Dallas yesterday), believing that US economic momentum is more than satisfactory, as it outstrips that of the main competitor zones.
Not a word about the Federal debt, which passed the $36,000 billion mark late last night.

Still according to the Federal Reserve, the capacity utilization rate in US industry deteriorated by 0.3 points to 77.1% in October, a level 2.6 points below its long-term average (1972-2023).

Excessively good consumer figures could dampen enthusiasm for US equities, lest they prompt the Federal Reserve to slow its rate cuts: Jerome Powell said yesterday 'there is no urgency to cut rates further').
This reinforces speculation about a possible 'status quo' between now and the end-January meeting and Donald Trump's inauguration.

Message received 5/5 by bond markets, with the US '10-yr' yield jumping +8pts to 4.502%, the '30-yr' +6pts to 4.644% and the '2-yr' +7pts to 4.364%.

Traders were nonetheless reassured this morning by the latest Chinese indicators, which reflect the relative dynamism of the economy.

Beijing announced that retail sales of consumer goods rose by 4.8% year-on-year last month, compared with 3.2% in September, driven by purchases of household appliances, furniture and automobiles and against the backdrop of the economic stimulus program.

Another important indicator is that industrial production in China rose by 5.3% last month, according to official data published on Friday.

Finally, still on the statistics front, consumer prices in France rose by 1.2% year-on-year in October 2024, a slight acceleration after +1.1% in September, according to Insee, which thus confirms its provisional estimate for last month announced at the end of October.

On the European bond market, the week also ended badly, with Bunds gaining +2.5pts to 2.367%, OATs +1pt to 3.095%, and Spanish Bonos +1.2pt to 3.0640%.
Bond yields - completely ignored in favor of the Trump Trade - could become a determining factor in stock market trends over the coming weeks.

Volatility rises sharply on the 'three witches' day', marked by the expiry of numerous futures and options contracts: the VIX jumps +8% to 15.50.... after resting the previous day in a 'zone of complacency'.
In French company news, TotalEnergies, alongside bp, Equinor and Shell, announce a joint investment of $500 million, aimed at creating a positive impact on access to energy for populations in key regions over the next few years.

Sanofi announces that the U.S. FDA has agreed to review a new supplemental Biologics License Application (sBLA) for its Dupixent (dupilumab) in the treatment of chronic spontaneous urticaria (CSU).

Finally, Air Liquide announced on Friday that it has decided to invest 50 million euros in a new hydrogen packaging and transport logistics chain along the Seine.


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