The Paris Stock Exchange experienced a slight decline of 0.5%, while Wall Street faced its sixth day of losses due to a sell-off in speculative assets. Donald Trump’s announcement of new tariffs on Chinese goods has raised concerns about global economic growth. Inflation data from the U.S. and Germany showed stability, although American consumer spending unexpectedly dropped. In the corporate sector, Teleperformance saw a significant share drop, while other companies like Saint-Gobain and Axa reported positive earnings.
Market Overview: Paris Stock Exchange and Global Trends
The Paris Stock Exchange managed to limit its losses, showing a decline of just 0.5% to about 8060 points. Meanwhile, Wall Street saw its sixth consecutive day of downturn on Thursday, marked by a significant sell-off of speculative assets such as Nvidia, Microstrategy, Palantir, ARM, Tesla, and Broadcom. These events were exacerbated by recent comments from Donald Trump, which have heightened concerns regarding global economic growth. The Euro-Stoxx50 also demonstrated some resilience, dipping only 0.6% to 5,440, while the DAX40 remained relatively stable, decreasing by 0.5%.
Inflation Insights and Economic Indicators
Yesterday, Donald Trump announced that an additional 10% tariff on Chinese goods will take effect on March 4, with no specified date yet for a potential 25% increase on imports from Europe. In response, China’s Ministry of Commerce expressed strong opposition and plans to implement countermeasures to safeguard its national interests.
Investment strategy advisor Christopher Dembik from Pictet Asset Management remarked, “The stock market has been ignoring the implications of the trade war for weeks. It was inevitable that this issue would resurface.” The repercussions were evident in Asian markets on Friday, where declines ranged from 2.9% in Tokyo to more than 3.2% in Hong Kong by the session’s end.
On a more positive note, investors are finding some comfort regarding inflation as the United States released its closely watched PCE index, alongside Germany’s CPI data, both of which are critical for shaping monetary policy just days before the European Central Bank’s meeting.
In the U.S., the PCE inflation rate remained steady at +2.5% (down from 2.6% in December), while the ‘Core rate,’ excluding food and energy, decreased by 0.3 points to +2.6% month-on-month, aligning with expectations. In Germany, the preliminary estimate from Destatis indicated that the consumer price index (CPI) is projected to be +2.3% year-on-year in February, unchanged from January.
Another significant figure emerged indicating a slowdown in American household consumption expenditures, which unexpectedly fell by 0.2% in January compared to the previous month. In contrast, incomes rose by 0.9% month-on-month, surpassing the anticipated increase of +0.6%.
In France, the preliminary estimate by Insee projected a year-on-year increase in consumer prices of just 0.8% in February, a notable drop from January’s +1.7%. This marks the first time since February 2021 that the annual change falls below 1%. Furthermore, French household consumption expenditures on goods decreased by 0.5% in January, following a 0.7% rise in December 2024.
In the bond market, the trend of easing continues, with the yield on 10-year German government bonds falling by 1.7 points to 2.397%. French bonds remain stable at 3.138%, leading to a yield spread between the Bund and French OAT stabilizing around 72/73 basis points.
In the U.S., the yield on ten-year Treasuries remains at approximately 4.245% (-1 point), notably lower than the three-month paper yield of 4.31%, potentially indicating an upcoming recession.
Amid rising risk aversion, traders are flocking to the dollar, causing the euro to dip to around $1.04, recovering slightly to 1.0410 after recent data, down from above the 1.05 threshold earlier in the week.
In the oil market, both Brent and American light crude prices have stabilized, with Brent trading above $74 per barrel.
On the corporate front, Teleperformance’s shares dropped by 10% after announcing an adjusted net income of €807 million, up from €732 million the previous year. Saint-Gobain reported an operating profit of €4.37 billion (+3.5%) and a consolidated net income of €2.84 billion (+6.6%), resulting in an EPS of €5.69 (+8.2%). Casino’s net income from continuing operations for 2024 reached €2.17 billion, recovering from a loss of €2.56 billion the prior year, despite a 24.7% decrease in adjusted EBITDA to €576 million, reflecting a margin of 6.8%. Finally, Oddo BHF has reiterated its ‘outperform’ rating on Axa, raising the price target slightly from €40 to €41 after the insurance company beat expectations with its 2024 results.