CAC40: benefits from a rebound as Wall Street closes

(CercleFinance.com) - The Paris Bourse rebounded sharply in early trading on Thursday, in what promises to be a quiet session as Wall Street closes for Thanksgiving.
The CAC 40 index climbed 0.8% to 7,200 points after three straight sessions in the red.

Yesterday, the Paris market ended the session down 0.7% at 7,143 points, in a climate of political uncertainty which continues to be a predominant risk from the investor's point of view.

The Barnier government's budget has still not been ratified by the French National Assembly and has been sent back to the Senate, where it is expected to be amended, but there is no guarantee that its final version will be validated by both chambers.

Beyond the political question, the economic, fiscal and geopolitical concerns affecting Europe are still prompting investors to be cautious, and seem to be preventing any immediate stock market recovery.

Since its all-time high in May, the CAC 40 index has fallen by 13.5%, while the Euro STOXX 50 has posted a limited gain of 4.7% at this stage of the year, a far cry from the more than 25% surge posted by the S&P 500 since the start of the year.

While the volume of activity is likely to be limited today due to the closure of US financial markets for Thanksgiving, the session in Europe will be enlivened by the latest inflation figures for Germany.

Due to a pronounced base effect in energy costs, inflation had risen from 1.8% in September to 2.4% in October.

Given that prices had fallen sharply (-0.7% on a monthly basis) in November 2023, the basis of comparison is likely to be unfavorable again this month.

On Wall Street, the US equity markets allowed themselves a marginal consolidation session yesterday, the day after another flurry of absolute record highs, despite a strong easing movement on rates.

At the final bell, the Dow Jones dropped 0.3% and the Nasdaq lost 0.6%.

On the US bond market, which will be closed this Thursday, the yield on 10-year Treasuries eased to 4.24% last night after the publication of an inflation indicator perfectly in line with expectations.

The New York Stock Exchange will reopen tomorrow, but only for half a day ('Black Friday').

Still on the bond front, the yield on French 10-year debt returned yesterday, at 3.02%, to the same level as its Greek equivalent.

While the German Bund eased to 2.16%, the financing differential ('spread') between France and Germany now stands at 86 basis points, compared with 45 points before the June 9 dissolution.

Oil prices were little changed, as investors waited to see how OPEC+, which meets next week, would react to ongoing geopolitical tensions and current economic uncertainties.

Brent crude was stable at $72.8 a barrel, while US light crude (West Texas Intermediate, WTI) was down 0.1% at just under $68.7.

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