CAC40 Decline Deepens as US Interest Rates Impact Market Performance

The Paris Stock Exchange is facing a downturn, influenced by significant declines in major companies like Publicis, Sanofi, and CapGemini. The CAC40 index has dropped 1% over the past week. Meanwhile, Wall Street also struggles, with the Dow, S&P 500, and Nasdaq all declining. Concerns about US industrial production and rising federal debt persist, although optimistic signals emerge from China’s economy. In corporate news, TotalEnergies and partners announced a $500 million investment to enhance energy access.

Paris Stock Exchange Faces Decline Amid Major Players’ Struggles

The Paris Stock Exchange is experiencing a significant downturn, currently down 0.5% and hovering around 7,260 points. This decline is largely attributed to notable drops in major companies such as Publicis, which has fallen by 6%, Sanofi at 4.2%, and CapGemini, down 3.8%. Over the past week, the CAC40 index has declined by 1%, with November losses nearing 3% as the month comes to a close. In contrast, US indices made gains in the previous session.

Turbulent Times for Wall Street and Global Markets

This trading session, known as the ‘three witches’, has brought tumult to Wall Street as well, with the Dow down 0.8%, the S&P 500 declining by 1.1%, and the Nasdaq dropping 1.8%. The tech-heavy Nasdaq was particularly affected by significant losses from Applied Materials, which fell 8.5%, Illumina at 7.2%, and Nvidia down 2.5%. Compounding these declines, the latest data on US industrial production revealed a sequential drop of 0.5% in September, revised from an initial estimate of 0.3%. The Federal Reserve indicated that a strike at a major aircraft manufacturer, notably Boeing, contributed to this decrease, as did the impact of two recent hurricanes.

Despite these setbacks, Jerome Powell, the Fed Chair, remains optimistic, suggesting that the US economy is performing well compared to other major economies. However, concerns about the rising federal debt, which has surpassed $36 trillion, linger in the background. The capacity utilization rate in US industry has also slipped to 77.1% in October, below its long-term average. Good consumer spending figures could potentially dampen stock market enthusiasm, as they may lead the Fed to reconsider its rate cut strategy.

On a brighter note, recent indicators from China show signs of economic vitality, with retail sales climbing 4.8% year-on-year in October, and industrial production increasing by 5.3%. In France, consumer prices rose by 1.2% year-on-year in October, a slight increase from the previous month. The European bond market has ended the week on a low note as well, with various bond yields rising. This market volatility is notable as many futures and options contracts expire, resulting in an 8% increase in the VIX index.

In corporate news, TotalEnergies, alongside bp, Equinor, and Shell, announced a joint investment of $500 million aimed at enhancing energy access in key regions. Sanofi has received approval from the US FDA to review a supplemental biologics license application for Dupixent in the treatment of chronic spontaneous urticaria. Additionally, Air Liquide has committed to investing €50 million in a new logistics chain dedicated to hydrogen packaging and delivery along the Seine.

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