CAC40: +0.5%, resists political suspense, 24 hours to go before S&P verdict

(CercleFinance.com) - The Paris Bourse trimmed its gains a little (+0.
5% to 7,180), while the CAC40 posted a somewhat unexpected rebound of +0.8% to 7,200 by mid-afternoon (erasing the -0.7% lost the previous day).

All this in volumes reduced to less than E1.3 billion, but in line with the scenario expected with the closing of Wall Street on Thursday for Thanksgiving.
Since its all-time high in May, the CAC 40 index has fallen by 13.5% (and is down -5% since January 1), while the Euro STOXX 50 is posting a limited gain of +5.5% at this stage of the year, a far cry from the surge of over 25% posted by the S&P 500 since the start of the year.

Investors today seem to consider that the political risk has been "priced in" after three sessions in a row in the red.

The Barnier government's budget (in 3 parts) has still not been ratified by the National Assembly and has been sent back to the Senate where it should be amended, but with no guarantee that its final version can be validated by both Houses.
A motion of censure will be tabled by the left and the suspense concerns its adoption by the 'RN' group before this weekend.
Another suspense: Will Standard & Poors downgrade French debt tomorrow?
Bond markets seem to think not.

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.


The session in Europe was enlivened by the latest inflation figures for Germany, which rose to 2.2% (unfavorable base effect compared to November 2023 for energy costs).

On Wall Street, U.S. equity markets allowed themselves a marginal consolidation session (-0.3% to -0.6%) yesterday, the day after a new flurry of absolute record highs, despite a strong easing movement on rates.
On the U.S. 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 debt eased by -6.5pts to 2.954%, while its Greek equivalent erased -7.1pts to 2.9500%.

The German Bund eased -3.5pts to 2.132%, with the spread between France and Germany narrowing slightly to +82 basis points (vs. +88pts on Tuesday), compared with 45 points before the June 9 dissolution.

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

Brent crude is down -0.3% to $73.2 a barrel, and US light crude (West Texas Intermediate, WTI) is down 0.2% to just under $68.6 (not significant, market closed).


Copyright (c) 2024 CercleFinance.com. All rights reserved.