CAC40: falls below 8100pts, weighed down by STMicro and Stellantis

(CercleFinance.com) - The Paris Bourse closed the session down 0.
95%, at 8094 points, weighed down by STMicro (-3.8%), Stellantis (-3%) and Teleperformance (-2.5%), far from Eurofins Scientific (+6.6%).

Across the Atlantic, the Nasdaq, S&P500 and Dow Jones are now all clawing back between 0.1 and 0.3% after falling victim to a mysterious air pocket at the opening.

It's hard to explain this rebound: to remain rational (after an initial fall that wasn't), 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 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 indices remain elevated, and that future survey indicators suggest that growth expectations are narrowing over the next six months.

The Labor Department reports a marginal increase of +2.000 new jobless claims in the US last week, to 223,000.

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 US, 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 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 compared to February 2024 to $398.400, representing the 20th consecutive month of year-on-year price increases (the $400,000 mark is close, or $3,000 of '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 interpreted as more 'accommodative' than expected.

According to Fed Chairman Jerome Powell, the latest economic data suggest that the US economy is weakening a little, but that neither recession nor inflationary overheating are on the horizon, and that there is therefore no need to change course.

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

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 -1.8pt to 2.778% and our OATs -0.3pt to 3.47%.
Brent crude oil (+1.4%) is trading at $71.9 and the euro is suddenly down -0.6% against the greenback, at $1,084.

Among Paris stocks, Sodexo (-17% at 60E) 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 (-1.6%) reports that it has reached an agreement with Dren Bio to acquire DR-0201, a bispecific targeted antibody that engages myeloid cells for robust B-cell depletion, 'an additional asset to consolidate its leadership in the immunology sphere'.

Also in the news, Eurofins Scientific (+6.6%) announces its intention to launch a fifth share buyback program, and Esso reports a fall in profits in 2024, while Valneva claims, on the contrary, an improvement in its results.

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