The CAC40 index opens November trading down 0.9%, amidst thin trading volumes. European markets, including the DAX40, experience similar declines, while U.S. stocks also fall, with the Nasdaq down 0.4%. Weak economic indicators from the Conference Board suggest ongoing challenges, including declining industrial orders and consumer pessimism. Key corporate earnings announcements are expected this week, with significant reports anticipated from various major firms. Meanwhile, gold and silver prices surge despite rising interest rates.
The CAC40 index has kicked off November’s trading period on a negative note, experiencing a decline of 0.9% to around 7,545 points, amid low trading volumes that saw 1.2 billion euros exchanged in just eight hours. The euro-Stoxx50 is also down to approximately 4,945 points, while the DAX40 dropped 1%.
In the US, Wall Street has mirrored these declines, opening lower with futures reflecting the sentiments: the Nasdaq fell by 0.4%, the S&P 500 decreased by 0.6% after reaching a record high last Friday, and the Dow Jones slipped by 0.7%.
Deutsche Bank has suggested that this week may not hold much excitement, despite acknowledging that earnings reports are currently unfolding and the proximity of the US elections is notable.
On Monday, the Conference Board released the leading indicators, showing a drop of 0.5%. This decline was more significant than the anticipated 0.3%. Over the six months from March to September 2024, the index fell 2.6%, a more considerable decrease than the 2.2% seen previously.
The Conference Board highlights weak new industrial orders, an inverted yield curve, reduced building permits, and consumer pessimism about future business conditions as contributing factors to this downturn.
Looking ahead, important data releases are expected later in the week, including preliminary PMI indices that gauge business sentiment in France and Germany.
The next few days will likely be dominated by corporate earnings announcements, with notable reports expected from companies such as SAP, L’Oréal, Deutsche Bank, Renault, Unilever, Sanofi in Europe, and AT&T, Boeing, Coca-Cola, and Tesla in the US. Thursday is set to be particularly busy, marking the peak of quarterly earnings season for October.
The pressures in equity markets can be attributed to ongoing tensions in interest rates, with yields reaching new highs since late July. Notably, US Treasury bonds have seen yields climb by 10.5 basis points to reach 4.1760%, while the 30-year bonds increased by 9.2 points to 4.4710%. The situation is similarly tense in Europe, with French OATs up 11.6 points to 3.013%, Bunds rising by 9.2 points to 2.278%, Italian BTPs climbing by 14.3 points to 3.511%, and Spanish ‘Bonos’ gaining 11.7 points to 2.994%.
Despite these rising interest rates, which typically weigh on precious metals, gold has surged by 1.5% to a new record price of $2,740, while silver has jumped 10% within 48 hours, now priced at $34.3. The dollar has also seen a slight gain of 0.35% against the euro, now at 1.08250.
In company news, Sanofi has entered exclusive negotiations for the potential sale of a 50% stake in Opella to CD&R, with Bpifrance set to hold a minority stake. Forvia reported third-quarter sales of 6.36 billion euros for 2024, reflecting a 2.6% decrease reported and a 0.4% organic decline, although it outperformed global automotive production by 420 basis points. The company reaffirmed its 2024 sales guidance of between 26.8 and 27.2 billion euros, expecting an operating margin of 5% to 5.3% and net cash flow of at least 550 million euros.
Additionally, Eutelsat Group announced the successful launch of 20 satellites in low-Earth orbit, augmenting the OneWeb satellite constellation using SpaceX’s Falcon 9 rocket. Based on its results as of September 30, the real estate group Icade anticipates its annual CFNC per share will align near the high end of their guidance, between 2.75 and 2.90 euros for strategic activities and between 3.55 and 3.70 euros overall.
Lastly, Ramsay Santé, a private hospital group, reported a net loss of 53.9 million euros for the 2023-24 financial year due to decreased operating income and escalating debt costs.