CAC40: buoyed by balance sheet dressing at W-Street, E/$ 1.048

(CercleFinance.com) - The Paris Bourse is back on track after a long, hesitant session: the reopening of Wall Street has made all the difference, and the CAC40 is up +0.
3% (to close in on 7,400), while the SBFF-120 is close to +0.4%, in slightly larger volumes than on Monday and Tuesday... but which do not reflect very intense balance sheet dressing operations.

The chips seem to be down in the United States too, where the S&P500 and Nasdaq gained 0.3%, but have averaged 30% gains this year.
The Dow Jones recovered 0.5% on Tuesday, having just posted its 9th consecutive session of declines, the first since 1978 and 1945.

The 'Dow' is the victim of a 'sector rotation' which continues to favour major technology stocks against the backdrop of the AI explosion.

The latest statistics make little difference, as the US Federal Reserve's decision to cut the interest rate by 25 basis points is set to take effect (the last major event of the year on the financial markets).

The main event at the end of the session, the Fed will issue a statement this evening at 8:00 p.m. (Paris time), at the end of a two-day meeting of its monetary policy committee, the FOMC.
This will be followed half an hour later by a press conference with Chairman Jerome Powell.
Investors will study the growth, inflation and rate forecasts of the central bank's officials in an attempt to fine-tune their expectations for the months ahead.

'We think Powell will try to adopt a neutral tone in his speech, but it is likely that his words will pave the way for a slowdown in rate cuts', predicts Danske Bank.

Yesterday's publication of solid consumer figures in the USA confirmed this scenario.

After last week's inflation figures, the fact that retail sales came in above expectations for the sixth month in a row is a new reason for the Fed to be more cautious in its rate-cutting cycle", says Bastien Drut, economist at CPR AM.

While waiting for the Fed's verdict, market participants discovered the figures for housing starts and building permits in the USA at 2:30pm.
According to data published by the Commerce Department, building permits jumped by 6.1% last month on a seasonally-adjusted basis, to an annualized rate of 1.50 million, compared with 1.42 million in October.
Compared with November 2023, building permits were down an insignificant 0.1%.
The number of housing starts fell by 1.8% to an annualized rate of 1.29 million, for a year-on-year decline of 14.6%.

In France, Moody's announced last night that it had downgraded the debt of seven major French banks, including BNP Paribas and Crédit Agricole, following the downgrading of France's sovereign rating last Friday.

Eurozone government bond yields down +1 to +1.5pts: French OATs 3.055%, Bunds 2.2450%, bringing the spread with Germany up to 81 points.

The US ten-year yield up +1.5pts from 4.385% to 4.400%, the 30-year yield up +2.5pts to 4.605%.

The euro was stable until around 3 p.m., losing a little ground (-0.2% against the dollar, which is trading at 1.0480) despite economic indicators reinforcing the scenario of a slowdown in Fed rate cuts.

The oil market rallied following this afternoon's unsurprising release of US crude inventories: Brent advanced by 0.9% to $74 a barrel, while West Texas Intermediate (WTI) rose by almost 1% to close to $71.


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