CAC40: buoyed by historic +7% rally in luxury goods

(CercleFinance.com) - The Paris stock market recorded its best performance in a quarter and, for once, outperformed other European markets by several lengths, with a gain of +2.
1% to 7,625 pts, benefiting from a surge in the luxury sector with +7.8% for LVMH, +7% for Kering and +5% for Hermès.
By midday, these 3 giants were even up by an average of +8%, one of the decade's leading "performances"!

This morning, Richemont's record results, with nine-month sales of 16.2 billion euros, up 3% (+4% at constant exchange rates), revived hopes of a recovery in the luxury sector.

The CAC40 is the driving force behind the E-Stoxx50 (+1.3%), which would be close to zero (as would the DAX at +0.2%) without our luxury stars.

On the statistics front, US retail sales rose by 0.4% in December, according to the Commerce Department.
This is 2 times less than the +0.8% sequential increase in November (revised from +0.7% initially announced),

Excluding the sometimes volatile automotive sector (vehicles and equipment), US retail sales also rose by 0.4% last month, whereas Bank of America had forecast a 0.6% increase.
On the employment front, the Labor Department reported 217,000 new jobless claims in the US in the week to January 6, up 14,000 on the previous week.

The four-week moving average - more representative of the underlying trend - came in at 212,750, down anecdotally by 750 on the previous week.

Finally, the number of people receiving regular benefits fell by 18,000 to 1,859,000 in the week to December 30, the most recent period available for this statistic.

In Europe, the inflation rate in Germany measured by the Harmonized Index of Retail Prices (HICP) was confirmed at 2.8% year-on-year in December, announced Destatis, the Federal Statistics Office, on Thursday.

There was little reaction to the publication of the minutes of the December 12 meeting of the Governing Council of the European Central Bank (ECB), which resulted in a fourth rate cut in the space of six months.

The institution's President, Christine Lagarde, expressed concern at the downside risks to eurozone growth.
After their sharp decline of -10pts on average the previous day, bond markets are trying to find a new equilibrium: 10- and 30-year T-Bonds are up +1.5pts, our OATs +4pts to 3.3860%, Bunds +4pts to 2.566% (i.e. an unchanged spread of 82 basis points), Italian BTPs +2.5pts to 3.713%.

While the latest US inflation figures are reassuring, investors may prefer to remain on the defensive pending Donald Trump's inauguration, scheduled for Monday.

It's likely that the 2025 stock market year will begin in earnest on January 20", warned the teams at Cogefi, a Paris-based portfolio management company, at the start of the week.

Crude oil prices soared yesterday, with a barrel of US light crude trading just above $80, for the first time since last summer.

A barrel of Brent gave up almost 0.8%, around $81.8 after testing $82.5 yesterday, for the 1st time since July 25 and August 12, 2024.

Gold is also waking up to the drop in rates, and is back above $2,700/Oz, up 2% in 24 hours to $2,718.
Finally, the Euro is down -0.2% to 1.0270/1.0275 against the Dollar.

In French company news, Alstom reports that it has signed a new agreement with Metrolinx for the overhaul and modernization of 181 double-decker suburban train cars for GO Transit, the public transport service of the Greater Golden Horseshoe region in Canada.

TotalEnergies announced that its European refining margin indicator had recovered to $25.9 per tonne in the fourth quarter of 2024, compared with $15.4 in the third quarter, an increase that should be reflected in downstream results and cash flow.

Finally, Stellantis reported on Thursday a 9% drop in vehicle deliveries in Q4 2024, mainly due to North America, where the automotive group is struggling to clear its inventories.


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