CAC40: weighed down by luxury goods, sinks towards 7,300, OAT at 3.25%.

(CercleFinance.com) - After a laborious gain of just 0.
2% to start 2025, the CAC40 reversed course on Friday, losing -1.2% (to 7,305pts, in the wake of luxury stocks with Kering -5% and LVMH -3.5%) as investors continue to question the outlook for the year ahead.
The heaviness extends to the other European indices, which had started the year well yesterday (London gaining +1%, Frankfurt +0.5%), with the E-Stoxx50 dropping between -0.7% and -0.8%.
Wall-Street should put an end to a series of 5 consecutive sessions of decline, but the publication of leading activity indicators (ISM) could call into question expectations of a +0.5% rebound at 3:30 pm.
After the Dollar's +1.2% surge on Thursday, the Euro remains weak at 1.0290, recovering modestly by +0.2%.
Monetary policy expectations diverge between the United States (1 to 2 rate cuts expected by the FED) and Europe, which is suffering from an economic situation close to stagnation: the ECB is expected to cut its key rates at least 3 times by 2025.

As we look forward to the year ahead, it's worth remembering that none of the last five years have gone exactly to plan in the macroeconomic sphere", warns Deutsche Bank.

For the time being, the German bank points to the major political events scheduled for the first quarter, namely the arrival of Donald Trump in the White House on January 20, as well as the parliamentary elections scheduled in Germany for February 23.

'Central banks should remain in the spotlight in 2025', it further believes, noting that while the Fed and ECB have signaled that further rate cuts are on the way, inflation remains slightly above their targets.

It will therefore be interesting to see whether we get the additional rate cuts that the markets are anticipating, or whether it will be another year (like the last three) where market expectations prove too accommodative', concludes Deutsche Bank.

In Europe, the deterioration continues for our OATs, with +3.5Pt to 3.248%, while Bunds add +1.3Pt to 2.38%: the OAT/Bund spread widens further to +86.8Pts, reflecting little confidence in France's ability to solve its deficit problems by 2025.

In stock news, EssilorLuxottica reports the acquisition of Pulse Audition, a startup offering AI-based noise reduction and voice enhancement solutions for the hearing impaired.

Reinsurer Scor announces the finalization of the sale of its stake in Humensis, France's ninth-largest general and educational publishing group, to Huyghens de Participations, holding company of the Albin Michel group.

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