Paris Stock Exchange shows resilience with the CAC40 down 0.6% at around 8,070, contrasting Wall Street’s significant declines. European indices, including Euro-Stoxx50 and DAX40, also fell, impacted by drops in major companies. Analysts highlight geopolitical tensions and economic indicators as key market influences. Despite European stocks outperforming U.S. counterparts this year, concerns about potential risks and valuations persist. Corporate news includes contracts in aerospace and positive clinical trial results from Sanofi.
Paris Stock Exchange: A Display of Resilience
The Paris Stock Exchange continues to demonstrate impressive resilience as the CAC40 experiences a modest decline of 0.6%, hovering around the 8,070 mark. In contrast, Wall Street faces a challenging start to the week with a significant drop of 2%, impacting major indices such as the Dow Jones, which fell by 0.8%, the S&P500 down by 2%, and the Nasdaq-100 plummeting by 3.1% to 19,570 points. Additionally, the ‘VIX’ index surged by 11% to reach 26.1, nearing its yearly peak of 27.6.
Market Dynamics and Economic Indicators
In Europe, the Euro-Stoxx50 saw a decrease of 1.3%, while the DAX40 declined by 1.5%, and the Bel-20 fell by 1.9% around 4 PM. The CAC40’s performance has been adversely affected by the significant drop in shares of Saint-Gobain, which fell by 5.1%, as well as declines in key banks like Société Générale (-5%), BNP Paribas (-2.3%), and Safran (-4%). Analysts suggest that political issues, such as the ongoing tariff war, along with geopolitical tensions in Europe, could have a more substantial impact on market performance than the sparse economic agenda ahead. Investors are awaiting the consumer price index (CPI) report due Wednesday, followed by producer price data expected the next day.
Despite recent fluctuations, European stocks have outperformed their American counterparts since the beginning of the year. As of March 10, the Euro-Stoxx50 has gained 10.5%, while the S&P500 has dipped by 3.7%, the DAX40 surged by 14.5%, and the Nasdaq has decreased by 8%. However, analysts caution that this trend may not purely indicate a stronger European economy but rather a shift in sentiment regarding economic expectations across the Atlantic. AXA IM experts highlight that the allure of the ‘Trump trade’ appears to be diminishing, leading to a potential resurgence in interest for traditional sectors in ‘old Europe’.
Some market professionals express concerns that the recent gains may be at risk. While maintaining a positive outlook on European equities compared to U.S. stocks since early December, strategists at J.Safra Sarasin recommend refraining from further increasing positions after a decade of strong European outperformance. They acknowledge, however, that there remains potential for growth in European small caps, which have yet to fully reflect the recent improvements in macroeconomic data. Lombard Odier analysts also anticipate some consolidation in the market in the upcoming weeks, suggesting that German stocks may be overvalued, while the French market could outperform in the short term.
On the statistics front, Germany’s industrial production rebounded by 2% in January after a revised contraction of 1.5% in December 2024, outperforming expectations of 1.5%. Meanwhile, the trade surplus decreased to 16 billion euros in January from 20.7 billion the previous month. Last week marked the worst for European bond markets since October 1998, with the yield on the 10-year Bund easing by 2.5% to 2.810%, while the OAT of the same maturity fell by 3 points to 3.522%. In the U.S., the yield on 10-year Treasuries dropped significantly by 11 points to 4.2100% as investors adopted a ‘risk-off’ approach just two days ahead of the consumer price report.
In currency markets, the euro remains stable at approximately 1.0830 USD. Following a significant decline last week, oil prices are seeing another slide, down by 0.9% to $69.8.
In corporate news, Thales Alenia Space, a collaboration between Thales (67%) and Leonardo (33%), has announced a contract for the production of the geostationary telecommunications satellite JSAT-32 for SKY Perfect JSAT, Asia’s largest satellite operator. Additionally, Safran Helicopter Engines has entered into an exclusive partnership with Robinson Helicopter Company (RHC) to supply engines for the R88 helicopter. Sanofi has reported positive results from its pivotal phase II/III ADEPT study on Dupixent for treating moderate to severe bullous pemphigoid in adults, which was presented at the 2025 Annual Congress of the American Academy of Dermatology (AAD). Finally, Dassault Aviation’s board has decided to reduce the company’s capital by canceling 198,527 treasury shares, representing 0.25% of its share capital.