CAC40: approaches 7400 pts as Fed awaits decision

(CercleFinance.com) - The Paris Bourse ended the session up 0.
26% at 7384 pts, buoyed by Renault (+5.2%), Vivendi (+3.5%) and Teleperformance (+2.5%).

Across the Atlantic, the momentum was similar, with the Nasdaq, S&P500 and Dow Jones gaining between 0.2% and 0.3% each.

The latest statistics had no influence on the trend, while the US Federal Reserve's decision to cut the interest rate by 25 basis points was ratified by the markets (the last major event of the year on the financial markets).

The main event of the day on the financial markets, the Fed will issue a statement this evening at 8pm Paris time, at the end of a two-day meeting of the FOMC, its monetary policy committee.

This will be followed half an hour later by a press conference by its Chairman, Jerome Powell.
Investors will study the growth, inflation and rate forecasts of central bank officials in an attempt to refine their expectations for the months ahead.

We think that 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", says 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 were treated to US housing starts and building permits figures 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 deteriorated by +1 to +1.5Pt: French OATs stood at 3.055%, Bunds at 2.245%, bringing the spread with Germany up to 81 points.

The U.S. 10-year is up +1.5pts from 4.385% to 4.40%, and the 30-year is up +2.5pts to 4.605%.

The euro is down 0.2% against the dollar, to $1.047/E, despite economic indicators reinforcing the scenario of a slowdown in Fed rate cuts.

The oil market rallies after the release this afternoon of unsurprising U.S. crude inventories: Brent is up 1% to $74 a barrel.

Lastly, in French corporate news, Crédit Agricole's Board of Directors has decided to appoint Olivier Gavalda as Chief Executive Officer at the close of the Annual General Meeting on May 14, 2025.

Renault, which holds a 35.7% stake in Nissan, posted the biggest rise on the CAC 40 following press reports of a potential tie-up between the Japanese automaker and its compatriot Honda. According to several articles, Nissan and Honda have entered into negotiations with a view to a possible merger, which led to a sharp rise in Nissan shares, which closed up over 23% in Tokyo.

Finally, the ESBG (European Savings and Retail Banking Group) announced the unanimous election of Nicolas Namias, Chairman of the Management Board of BPCE, as Chairman of the ESBG, for a three-year term.

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