Paris Stock Exchange remains stable around 7495 points, driven by gains in CapGemini and Bureau Veritas, while Pernod Ricard and Renault decline. Recent economic indicators show a 0.3% rebound in household consumption and a 0.2% increase in manufacturing production. The upcoming U.S. employment report may impact Federal Reserve policy, with predictions of 170,000 new jobs. Meanwhile, the euro weakens against the dollar, and Brent crude approaches $78.3 per barrel amid increased demand.
Paris Stock Market Overview
The Paris Stock Exchange is experiencing a stable performance this morning, hovering around the 7495-point mark. Key players such as CapGemini (+2.1%) and Bureau Veritas (+1.2%) are driving gains, while Pernod Ricard (-1.3%) and Renault (-0.8%) are contributing to the declines.
Latest Economic Indicators
Recent statistics have provided insight into the French economy. In November 2024, household consumption expenditures on goods rebounded by 0.3% in volume compared to the previous month (revised from an initial estimate of -0.4% in October), according to Insee. Additionally, manufacturing production in France saw a slight uptick of 0.2% month-on-month, following a decline of -0.1% in October, while overall industrial production also increased by 0.2%, rebounding from a -0.3% drop.
As the market awaits the Department of Labor’s employment report scheduled for release at 2:30 PM, it is expected to have a significant influence on the Federal Reserve’s monetary policy. Economists predict approximately 170,000 non-farm job additions in December, a decrease from 227,000 in November, with the unemployment rate expected to hold steady at 4.2%. Investors are looking for confirmation of the labor market’s recent slowdown, which could bolster the case for potential rate cuts by the Fed this year.
Prior reports, including the ADP and the employment component of ISM surveys, indicate that hiring momentum is diminishing in the United States. Bastien Drut, head of strategy and economic studies at CPR AM, notes, “The easing of labor market tightness will prompt FOMC members to consider gradually moving towards monetary neutrality, continuing to lower rates.” However, he cautions that the Fed may proceed cautiously amidst ongoing disinflation concerns and uncertainty surrounding the Trump administration’s policies.
Recent developments, including Donald Trump’s assertive stance on trade and rising British bond yields, have not fostered an environment conducive to risk-taking. Following a strong performance in 2024, particularly for U.S. equities, Goldman Sachs has raised concerns about an impending stock market correction, estimating a nearly 30% chance of a decline of 10% or more over the next three months, and over 20% within the next year—up from a low level in Q4 2024.
For the week thus far, the CAC is trending upward by more than 2.8%, with three out of four trading sessions closing positively. In the bond market, the UK’s crisis persists, though the yield on ten-year Gilts has eased to 4.81% after reaching a peak of 4.98% yesterday, approaching the critical 5% threshold, marking the highest borrowing rate since the 2008 financial crisis.
On the currency front, the euro continues its decline against the dollar, trading below the 1.03 level, although it could recover if U.S. employment data exceeds expectations. Meanwhile, the oil market is poised for a third consecutive week of gains, buoyed by increasing demand despite ongoing economic slowdown fears and interest rate uncertainties. Brent crude has risen by 1.5%, nearing $78.3 per barrel.
In corporate news, Unibail-Rodamco-Westfield announced the sale of a 25% stake in its shopping center Centrum Cerny Most in Prague to Upvest and RSJ Investments. Additionally, Engie has reported an expansion of its flagship wind farm project in Ras Ghareb, Egypt, increasing the total capacity from 500 MW to 650 MW.