CAC40: month begins without volume, no trend at WStreet

(CercleFinance.com) - The Paris stock market is weighed down, with the CAC40 starting the December trading term down -0.
2%, at 7,260 points (in anecdotal volumes of less than E1bn in 7 hours of trading), penalized by the downturn in ST-Micro (-3.3%), Vivendi (-1.8%) and St-Gobain (-1%) at the dawn of what promises to be a quiet week, with few major indicators on the agenda.

The themes that continue to preoccupy the markets are now well known: on the one hand, the effect of Trump's election, weak demand from China and disparate corporate comments on the third quarter", point out Edmond de Rothschild's teams.

"On this last point, more than half the companies in the STOXX 600 have published their results, and only a few sectors have surprised positively on average", stresses the private bank.

Barclays' strategists point out that European companies reported an average of 3% growth in third-quarter earnings per share (EPS), compared with 7% for their US counterparts.

The Trump Trade - which carried Wall Street in the wake of the November 5 presidential election - nevertheless seems to have run out of steam over the past week.

After surging by 5% to 6% in the sessions following the election, the major New York indices gave up between 1% and 3% last week, worried about the repercussions of the next American president's policies.
The December stock market term got off to a trendless start on Wall Street, with -0.2% on the Dow Jones, +0.1% on the S&P500 and +0.3% on the Nasdaq, which had fallen by -2.5% on Friday ('3 Witches' Day').

Equities had been weighed down by strong intraday interest rate pressure on Friday (with the '10 yr' testing 4.51%), and after a lull on Friday evening, yields are back on the rise, with the '10 yr' up +4pts to 4.467%, and the '30 yr' up nearly 6pts to 4.66%, its worst level since the end of last May.

Investors fear that the real estate magnate's pro-business approach will lead to a resurgence in inflation, which could cause the Fed to slow its rate cuts.

The economic agenda looks set to be fairly light this week, with the main event set for Friday with the publication of the European flash PMI indices.

These data will enable us to gauge the reaction of European companies to Donald Trump's recent victory and their feelings regarding the possible introduction of tariffs likely to penalize their business.

Against this backdrop, all eyes should be on Wednesday evening's results from Nvidia, now the world's largest listed company ahead of Apple (its capitalization represents 1.2 times France's GDP)...

The AI chipmaker's performance could help revive a technology segment that has been losing momentum of late (-1.6% for the S&P sector index over the past month).

Analysts covering the stock are expecting a publication comparable to its latest announcements, i.e. better-than-expected accounts accompanied by an increase in targets, especially as the semiconductor designer is now starting to capitalize on the recent launch of its new architecture, dubbed 'Blackwell'.

On the FOREX, a quiet session with the Euro up 0.15% at $1.0565.
Gold breaks through the $2,600 barrier, oil climbs +2.2% to $72.75 in London.

In the news for French companies, Orange announces that it is appealing the seizure, on October 7, of 312 million euros, ordered by the National Financial Prosecutor's Office (PNF) as part of a dispute over VAT rates applied to certain promotional offers between 2017 and 2019.

Vivendi reports that Canal+ is organizing a Capital Markets Day on Monday, during which its strategy and ambitions will be presented in the run-up to its listing on the London Stock Exchange, scheduled for December 16.

Finally, La Française des Jeux (FDJ) reports that it has successfully placed its inaugural bond issue for 1.5 billion euros, in three tranches of 500 million each maturing in six, nine and 12 years, and with annual coupons of 3.000%, 3.375% and 3.625%.

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