CAC40: all indicators turn green after CPI & quarterly results

(CercleFinance.com) - Finally, some really good news on Wednesday.

The Paris Bourse jumped +1.2% and the CAC repositioned itself above 7,500pts (towards 7,510/7,515pts), following the publication of a US CPI in line with expectations, and even slightly better than expected in core data (excluding volatile price elements).

The 3 main U.S. indices, which were up moderately in the pre-opening session, have jumped from +1.5% to +1.8% since 2.30 p.m., and yields have suddenly eased from -8 to -10pts.
The '10 yr US' fell from 4.79% to 4.706%, the '30 yr' from 4.985% to 4.902%, the '2 yr' from 4.365% to 4.2900%.
Investors are returning to a scenario of 2 FED rate cuts, in June (65%) and December (almost 50%).
This sudden fall in US rates has boosted European debt: Bunds are down 7.5pts to 2.546%, our OATs are down 10pts to 3.37%, and Italian BTPs are down 13pts to 3.7060%.
The OAT/Bund spread contracts to +82.5Pts (this is due to the feeling that the Bayrou government will escape censure tomorrow), in addition to the pleasant surprise of the US CPI.
According to the Labor Department, the US consumer price index rose by 2.9% in December 2024 compared with the same month in 2023 (as expected), an annual rate in line with expectations and up 0.2 points on November.

Excluding energy (-0.5%) and food (+2.5%), two traditionally volatile categories, the underlying annual inflation rate came out at 3.2% last month, a level slightly below economists' consensus.

On a sequential basis, i.e. between November and December 2024, US consumer prices rose by 0.4% unadjusted and by 0.2% excluding energy and food

Economic activity declined in New York State in January, according to companies responding to the Empire State Manufacturing Survey. The overall index of economic conditions fell by fifteen points to -12.6.

New orders fell slightly, while shipments were virtually unchanged.

Meanwhile, labor market indicators showed stable employment levels, but a decline in the average length of the working week. Increases in input and selling prices accelerated.

Companies were more optimistic that conditions would improve in the months ahead.

This morning, investors took note of inflation data for France. Over one year, consumer prices in France rose by 1.3% in December 2024, a stable annual rate compared with November, in line with the provisional estimate published last week by Insee.

The markets are anticipating a hectic second half of the week, with a flurry of earnings releases and an intense macroeconomic agenda.

It's off to a good start for US banks, with good Q4 results: pre-opening rises of +3 to +5.5% have been observed for Morgan Stanley (+3.4%), Goldman Sachs (+4%), Blackrock (+3.7%), Citi and Wells Fargo (+5%)... but JPMorgan remains a little behind (+1.8%).

The strength of consumer spending and the country's economic outlook remain to be assessed in the light of Donald Trump's first policy decisions.

Other factors to watch: Brent crude oil is stagnating at around $80.5 a barrel (if it rises above $81, this will affect inflation forecasts), and on the currency front, the dollar is down -0.4% (at 1.0350 against the euro, its rapid rise could handicap US exports).

In the news from French companies, Esker boasts its best year ever, with sales for the full year 2024 of 205.3 million euros, up 15% at constant exchange rates and on a reported basis.

Under the framework agreement signed with TenneT in May 2023, and following the first contracts announced in March 2024 for the BalWin3 and LanWin4 links, Nexans reports that it has won the contract for the LanWin2 project, worth one billion euros.

Voltalia announces the start of construction of the Los Venados solar project, with a total capacity of 19.7 megawatts, in the Tolima region. The Group's first project in Colombia, it is scheduled for commissioning in the first quarter of 2026.

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