CAC40: ends at equilibrium after unsurprising ECB statement

(CercleFinance.com) - The Paris Bourse ended the session at breakeven (-0.
03%), at 7420 pts, split between gains by Airbus (+2.3%), Société Générale (+1.8%) and Pernod Ricard (+1.7%), but penalized by Edenred (-3.3%), Teleperformance and Capgmini (-1.5%).

Since the opening, investors have been waiting for the ECB's announcement that, unsurprisingly, it has decided to cut its main key rates by -0.25Pt, to 3.00% (Repo), 3.15% and 3.40% respectively, with effect from December 18.

The ECB's press release contained a few economic indications: no reaction to the lowering of EU GDP growth forecasts for 2025 (+0.7%).... because the recovery is slower than expected in 2024.

The ECB is talking about a 'neutral rate' (assuming inflation settles near the 2% pivot) of 1.75 to 2.50% within the next year (the range remains fairly wide), which implies a continued rate cut at a rate of -25Pts per quarter.

The ECB estimates that growth in Q3 reached +0.4% thanks to tourism (Olympic Games effect) before slowing in early autumn (decline in job offers): we'll have to wait until 2026 to see growth reaccelerate to +1.4%, then 1.3% in 2027.

Inflation is expected to rise to +2.3% in 2025 (after +2.4% in 2024) and +1.9% in 2026 and 2027 (prices remaining high due to the rise in wages observed in the zone).

The FED is likely to follow the ECB's lead next Wednesday with a 25 basis point easing of its key rates, a scenario anticipated by 85% of investors.

Across the Atlantic, movements are timid: the Nasdaq is down -0.2%, the S&P500 is down 0.1% and the Dow Jones is at equilibrium.

On the statistics front, the Labor Department reported that US producer prices rose by 0.4% in November compared with the previous month, and by 0.1% excluding food, energy and commercial services.

The Labor Department also announced 242.000 new US jobless claims for the week ending December 2, up 17,000 on the previous week.

On the bond front, 10-year OATs eased -1.7Pt and Bunds -1.2Pt, with the spread below 76 Pts. Across the Atlantic, T-Bonds of the same maturity are tightening by +2.8Pts to 4.30%.

On the FOREX, the euro is up 0.1% against the greenback, at $1.050/E.

In French company news, Bic announced last night the acquisition of Tangle Teezer, a brand of high-quality detangling hairbrushes, for 200 ME. The group has also begun a transition process to appoint a new CEO by September 30, 2025, as Gonzalve Bich's term of office comes to an end.

Ahead of its Investor Day, Sopra Steria announces its financial targets for 2028, including an improved operating margin rate of between 10% and 11%, and a return on capital employed before tax rising to around 20%.

Airbus Helicopters announces that it has signed a contract with the Bahraini Ministry of the Interior for the purchase of nine H145 helicopters, which will be used for law enforcement and emergency medical services in the kingdom.

The Seb Group announces the validation by the Science Based Targets (SBTi) initiative of its new targets accelerating the reduction of greenhouse gas (GHG) emissions, covering scopes 1, 2 and 3, by 2030 and 2050.

Lastly, TF1 announced that, following the selection of its LCI, TMC and TFX channels on July 24, ARCOM had today issued their authorizations to broadcast on DTT for a period of ten years, renewable for a further five years.

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