CAC40: the trend worsens, US rates are weighed down

(CercleFinance.com) - The Paris stock market is down by a further -0.
5% to 7,260 points, weighed down by Publicis (-6%), Sanofi (-4.2%) and Capgemini (-3.8%).
Over the past week, the CAC40 has lost -1%, and over the month of November (which ends at 4 p.m.), the loss is close to -3%, while US indices rose symmetrically on Thursday evening
But this session of the "3 witches" turned into a storm on Wall Street: -0.8% on the Dow, -1.1% on the S&P and -1.8% on the Nasdaq (led by Applied Materials with -8.5%, Illumina -7.2%, Nvidia -2.5%).

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 +6pts to 4.482% (4.51% high), the '30-yr' +4pts to 4.6234% and the '2-yr' +4pts to 4.334% (4.38% high).

Nevertheless, operators were 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'.

The Dollar fell back -0.1% to 1.0555% against the Euro, after 1.0590 at midday
In French company news, TotalEnergies, alongside bp, Equinor and Shell, announced 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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