CAC40: heaviness prevails, W-Street remains rather volatile

(CercleFinance.com) - The Paris Bourse lost just under 1% (to 8,095Pts) with 45 minutes to go before the close, after losing -1.
3% to 8,065, in the wake of Wall Street's mysterious pre-opening stall as of 10:00 a.m. French time.
The CAC40 was weighed down by Stellantis (-3.3%), ST-Micro and Arcelor (-3%), as well as BNP-Paribas and Thalès (-2.3%).
US indices, which were losing more than 1% on average at around 1pm, limited the damage with -0.7% at the opening before rallying vigorously: the S&P500 and Nasdaq gained +0.4%, the Dow Jones +0.5%.
So the pre-opening "air pocket" has been filled, and then some (but what happened?).).

Difficult to explain this rebound: to remain rational (after an initial fall which was not), 2 figures were published in the US at 1:30 p.m... and they only added to investors' perplexity.

Manufacturing activity in the Philadelphia region declined, according to the local Fed's index, which fell from 18.1 in February to 12.5 in March, its second consecutive drop.

Survey indicators for general current activity, new orders and shipments fell, while in a completely paradoxical move, the employment index hit a multi-year high.
The Philly Fed adds that both price indexes remain elevated, and that future indicators from the survey suggest growth expectations are narrowing over the next six months.

The Labor Department reports a marginal increase of +2,000 in new U.S. jobless claims last week, to 223,000.
The four-week moving average - more representative of the underlying trend - came in at 227,000, a marginal increase of 750 on the previous week.
A little later, Wall Street took note of 2 other instructive 'stats': the index of leading indicators, supposed to foreshadow the evolution of activity in the United States, came out down by 0.3% in February after a contraction of 0.2% the previous month (revised from -0.3% on first reading), according to the Conference Board.
Households' expectations for future business conditions have become more pessimistic", points out Justyna Zabinska-La Monica, senior manager, business cycle indicators, at the employers' organization.

New manufacturing orders, which had improved in January, contracted and were the second biggest negative contributor to the index's monthly decline", adds the economist.
Meanwhile, while real estate has never been so unaffordable for households, existing home sales rose by 4.2% in February to a seasonally adjusted annual rate of 4.26 million (-1.2% year-on-year), according to data from the National Association of Realtors (NAR).
The median price of existing home sales rose 3.8% last month from February 2024 to $398,400, marking the 20th consecutive month of year-over-year price increases (the $400.000 mark is close, i.e. $3,000 in 'rent'/month on a $320,000 loan).

The stock of unsold existing homes rose by 5.1% on the previous month to 1.24 million at the end of February, equivalent to 3.5 months' supply at the current rate of monthly sales.

Last night, as expected, the US central bank kept its key rates unchanged at 4.25/4.50% for the second time in a row, but made comments and projections that were interpreted as more 'accommodative' than expected.
According to Chairman Jerome Powell, the latest economic data suggest that the US economy is weakening somewhat, but that neither recession nor inflationary overheating are on the horizon, and that there is therefore no need for him to change his tune.

Although its updated projections still point to two rate cuts over the course of the year, more policymakers than before are considering not cutting rates at all, or only once," Commerzbank points out.

After the Fed on Wednesday evening, the Bank of England announced that it would keep its key rate unchanged at 4.50% (a vote of seven to two was anticipated by Bank of America).

On the bond front, US 10-year T-Bonds eased -2.3pts to 4.232%, Bunds -1.8pts to 2.778% and our OATs -0.3% to 3.47%.
Brent crude oil (+0.3%) traded at $71 and the euro suddenly dropped -0.7% against the greenback, to $1.0835.

In Paris, Sodexo (-18% to 59E) lowered its outlook for fiscal 2025, mainly due to weaker-than-expected organic growth in North America, on the occasion of an estimate of its first-half results.

Sanofi reports that it has reached an agreement with Dren Bio to acquire DR-0201, a bispecific antibody targeting myeloid cells for robust B-cell depletion, 'an additional asset to consolidate its leadership in the immunology sphere'.

Also in the news, Eurofins Scientific announces its intention to launch a fifth share buyback program, and Esso reports a fall in profits in 2024, while Valneva claims an improvement in its results.

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