CAC40: ends the week 'flat' with the euro plunging to $1.04

(CercleFinance.com) - A score of +0.
5% with 1/2 an hour to go before the close is quite unexpected, but can be explained by the euro's spectacular fall below 1.0400 against the dollar, which has restored some color to our exporters.
The Paris stock market got off to a poor start this morning, with the CAC40 losing 0.8% around 7,160 points.160 points, penalized by the -2.2% decline in banking stocks and Thales, which shed almost 4% following the announcement of the opening of an investigation in the UK (see below) into alleged corruption.

However, European indices once again turned the tide in the wake of Wall Street (+0.6% for the Dow Jones, +0.3% for the S&P and +0.1% for the NASDAQ), and the Euro-Stoxx50 (+0.6% at 4,785) once again "saved" the 4,740Pts support level.

The week now drawing to a close has seen the performance differential widen a little more in Wall Street's favor: although the CAC40 erased its weekly decline of -1% this morning... the US indices are heading for a comfortable gain of +1.5% on average.
The underperformance of Eurozone equities can be explained by a string of poor statistics: after reporting a stagnation in global activity in October, the HCOB composite flash PMI index for the Eurozone fell to 48.1 in November, highlighting the sharpest contraction in global activity since January.

In France, the HCOB composite PMI flash index for overall activity fell sharply in November, from 48.1 in October to 44.8 for the current month, indicating the sharpest deterioration in private sector business conditions since January.

These figures confirm the sluggishness of the Old Continent's economy, a factor behind the recent slide in European stock markets relative to Wall Street.

Given the marked slowdown in Germany, these statistics could nevertheless raise hopes of more aggressive rate cuts by the ECB.... which weighed on the Euro, with a fall of -0.75% towards 1.0400 (and even 1.0335 during the session), marking the breaking of the 1.0465 support level of October 3, 2023 and its return to lows since early December 2022... towards 1.0040/$, a low dating from early December 2022.

The dollar has also been strengthened by the afternoon publication of 2 US indices, which are the opposite of those published this morning in Europe.
Growth in the US private sector accelerated in November, according to the S&P Global composite PMI, which came in at 55.3 in flash estimate, a 31-month high, after 54.1 in final estimate for the previous month.

For the record, the 50-point threshold separates an expansion from a contraction in a sector's activity: the higher the PMI above this threshold, the faster the pace of expansion.
Business production expectations for the coming year reach their highest level since May 2022, buoyed by the prospect of lower interest rates, improved economic growth and a more pro-business administration.

US household sentiment improved in November, but by less than the first estimate, show the final results of the University of Michigan's monthly survey published on Friday.
The confidence index rose to 71.8, after 70.5 in October, whereas an initial estimate had put it at 73 two weeks ago, which economists were expecting to be confirmed.

On the bond front, T-Bonds eased -2.3pts to 4.412%, while in Europe, Bunds eased -6pts to 2.253% and our OATs -4.5pts to 3.051% (the 80-pt spread mark has been reached, and it's worrying).

On the energy markets, oil prices were little changed, still torn between geopolitical uncertainties and questions about global growth, with Brent crude oil hovering around $74.7 a barrel (+0.4%) in London.

In French company news, the Serious Fraud Office (SFO), the UK's anti-fraud body, announced on Friday the launch of an investigation into Thales, on suspicion of bribe payments.

Although the exact nature of the investigation is not known, Nick Ephgrave, the SFO's director, refers to "serious allegations" of irregularities.

In addition, ahead of an investor day (CMD) devoted to Vinci Energies, Vinci says it expects annual sales growth for this division in the mid- to high-single digits on average between 2024 and 2030.

Finally, Worldline announces that it has placed a €500 million bond issue maturing in November 2029, with a coupon of 5.25%. Settlement and delivery are scheduled for November 27, and the bonds will be listed on the Luxembourg Stock Exchange.


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