CAC40: falls back to 7400 despite Nasdaq's +1.4% post-CPI performance

(CercleFinance.com) - The Paris Bourse (+0.
2%) fell back to 7,410, after topping out below 7,430/7,435 between 2:30 pm (publication of the US CPI) and 3:30 pm (opening of the Wall Street markets).

The CAC40 is gradually returning to square one, and the Euro-Stoxx50 is practically back to square one with +0.1% at 4,950, reflecting a wait-and-see attitude ahead of the publication of US inflation figures and the European Central Bank (ECB) meeting.

If the session ends without a trend, it will be a reflection of the Tokyo Stock Exchange this morning (+0.01%, the smallest positive gap for a 7th rise in a series of 8).
Wall Street seems more enthusiastic, but the gains were already secured before the CPI was published.
While the Dow Jones stagnates or declines by 0.1%, the S&P500 gains +0.7% and the Nasdaq +&.4% (double) thanks to a number of "technos" such as Broadcom (+4.5%) and above all Alphabet with a +4% rise.

The week's most eagerly-awaited figure is therefore a non-event: it came in as expected at +2.7% according to the Labor Department, up 0.1 points on October.

Excluding energy (-3.2%) and food (+2.4%), two traditionally volatile categories, the annual underlying inflation rate came in at 3.3% last month, a level also in line with economists' forecasts.
On a sequential basis, i.e. between the months of October and November 2024, US consumer prices rose by 0.3%, both unadjusted and excluding energy and food.

There remains the suspense surrounding tomorrow's ECB meeting: the market believes that the ECB should opt for a further 25 basis point cut in its main key rates.

However, analysts believe that the key element of the meeting will be the Frankfurt-based institution's updated economic forecasts.

A possible upward revision of the eurozone's growth forecast, currently set at 1.3% for 2025, could herald an acceleration in the current monetary easing.

"If the ECB removes its famous phrase 'rates will be kept sufficiently restrictive for as long as necessary' from its statement, this will herald a new objective for the ECB to rapidly lower its key rate to its neutral level", analyzes Patrick Barbe, at Neuberger Berman.

On Wall Street, US equity markets lined up for a second session of gains, with futures indicating a pre-opening rise of +0.3 to +0.5%.
According to CME's FedWatch tool, the markets estimate that the chances of the Fed making another rate cut in a week's time are over 86%.

The bond compartment is little changed, with the spread between the yield on ten-year German Bunds (2.128%, i.e. +1Pt) and that on OATs of the same maturity (2.886%, i.e. +2Pts) widening by +1Pt to 77Pts.
On the other side of the Atlantic, the yield on 10-year Treasuries, the benchmark for US borrowing costs, rose by +3 basis points to 4.253%.
The dollar continued to recover, with a spread of +0.4%: the $-Index rose to 106.80, while the euro fell symmetrically by -0.453% to 1.0495/1.0485.

On the energy market, oil prices maintain their bullish bias ahead of this afternoon's release of weekly US oil inventory data. Brent crude advanced by 1.2% to $72.9 a barrel.

In French company news, STMicroelectronics unveiled on Wednesday the first product to emerge from its strategic collaboration with US company Qualcomm, a new component designed to simplify the development of wireless applications for the industrial and Internet of Things (IoT) sectors.

ArcelorMittal announced on Wednesday the launch of a bond issue for a total of one billion euros, to be used in particular to refinance its debt. Two tranches of 500 ME maturing in 2028 and 2031 will be issued, with coupons of 3.125% and 3.50% respectively.

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