Market reactions to François Bayrou’s appointment were tepid, with the CAC40 index showing a slight increase, primarily driven by the automotive sector. The ECB cut rates for the fourth time this year, raising expectations for continued easing into 2025, though some analysts were disappointed by the lack of additional support. Economic indicators pointed to stable industrial production in the eurozone, while inflation in France rose slightly, and Germany’s trade surplus decreased. In corporate updates, Smulders secured a significant contract, and Teleperformance canceled a portion of its shares.
Market Reaction to François Bayrou’s Appointment
The Paris Stock Exchange reacted with indifference to the appointment of François Bayrou, following a series of intense discussions with President Macron, a sentiment echoed across various media outlets. Bayrou, who represents a mere 34 deputies out of 575 in the Assembly, is part of the coalition that faced defeat in both the European and legislative elections. This raises the question: how long will it be before he faces censure?
The CAC40 index remains stable, showing a 0.4% increase around the 7,450 mark, buoyed by the automotive sector’s performance, with Renault up by 1.7% and Stellantis by 1.2%.
ECB Cuts Rates Amid Mixed Market Sentiment
In a significant move, the European Central Bank (ECB) announced a reduction in its key rates for the fourth consecutive time this year. The monetary policy statement and subsequent press conference by ECB President Christine Lagarde heightened expectations for ongoing monetary easing into 2025.
Although this perspective typically bodes well for stock markets, some analysts expressed disappointment regarding the ECB’s communication and its apparent reluctance to provide additional support for growth through a more lenient monetary policy. Ann-Katrin Petersen, a strategist at the BlackRock Investment Institute, pointed out that the central bank did not offer a substantial boost for the markets by dismissing the possibility of more extensive support measures.
Petersen further elaborated that, despite positive indicators concerning the recovery of private consumption, the eurozone is grappling with various growth challenges, such as escalating US tariffs, increasing geopolitical fragmentation, and political uncertainties across several nations.
On the economic front, investors were informed of several statistics this morning. Eurostat’s preliminary estimates indicated that seasonally adjusted industrial production remained stable in the eurozone, with a modest 0.3% increase in the EU. Breakdown reveals a 1.7% rise in investment goods, while production for intermediate goods remained unchanged. Conversely, energy output declined by 1.9%, durable consumer goods by 1.8%, and non-durable consumer goods by 2.3%.
Comparatively, industrial production fell by 1.5% in the eurozone and 1.4% in the EU from August to September 2024. Year-on-year, production decreased by 1.2% in the eurozone and 0.8% in the EU by October 2023.
Inflation trends indicate that consumer prices in France rose by 1.3% in November 2024, slightly up from 1.2% in October, as reported by Insee, which reaffirmed its preliminary estimate for the previous month. Meanwhile, Germany’s trade surplus declined in October, highlighting the ongoing struggles of Europe’s largest economy. The trade surplus was recorded at 13.4 billion euros, down from 16.9 billion in September, as reported by Destatis, the federal statistical office.
In the United States, import prices saw a minor increase of 0.1% in November compared to the previous month, with stability observed when excluding fuel. Export prices also remained unchanged, reflecting a 0.1% rise when agricultural products are excluded. Year-on-year, US import and export prices rose by 1.3% and 0.8%, respectively.
In corporate news, Smulders, the Belgian subsidiary of Eiffage Métal, has secured the EPC (Engineering, Procurement, and Construction) contract from Chantiers de l’Atlantique, representing RTE for the jacket foundations of two electrical substations for the upcoming offshore wind farms, Centre Manche 1 and Centre Manche 2. Additionally, Teleperformance announced the cancellation of 864,458 self-held shares, accounting for 1.42% of its share capital, following the authorization received at the AGM on April 13, 2023.