Paris Stock Exchange is facing a downturn, with the CAC 40 index falling 1.1% to around 7110 points amid looming American economic data ahead of Thanksgiving. Following recent tariff threats from Donald Trump, the market closed down 0.9% yesterday. Analysts note a muted global response to Trump’s comments. Investors await crucial GDP and consumer spending data that could influence December rate cut expectations. Meanwhile, U.S. Treasury yields rise, and oil prices remain stable despite geopolitical tensions.
Paris Stock Exchange Takes a Hit Ahead of Thanksgiving
The Paris Stock Exchange is experiencing a downward trend this Wednesday morning, with a significant array of American economic indicators set to dominate the day as Thanksgiving approaches in the United States. The CAC 40 index has dropped by 1.1%, hovering around the 7110 points mark.
Following Donald Trump’s recent threats regarding new tariffs, the Paris market concluded yesterday’s trading session with a decline of 0.9%, settling at 71974 points and falling beneath the crucial 7200 points level.
Market Reactions and Economic Outlook
Despite the unsettling comments from Trump, some analysts observe that global stock markets are exhibiting a restrained response, attributing it to a sense of ‘déjà vu’ reminiscent of the trade war atmosphere during his previous administration. “It’s noteworthy that Europe was largely absent from the threats issued by Trump, who directed his focus on nations like Mexico, Canada, and China,” remarked a trader.
Investors are bracing for a busy Wednesday filled with economic data releases, particularly as Wall Street will be closed for Thanksgiving and will resume trading for a half-session on ‘Black Friday.’ “It feels as though the trading week is concluding today,” the trader added.
The second estimate of the United States’ gross domestic product (GDP) is anticipated to reaffirm that American growth surged at a robust annualized rate of 2.8% in the second quarter. Furthermore, key attention will be on household income and spending data, which includes the PCE price index, the Federal Reserve’s preferred gauge of inflation.
These economic figures hold the potential to either bolster or undermine the current market expectations for a rate cut in December, which market players currently assess at 66%, according to the Fed’s FedWatch barometer. Interestingly, the minutes from the last Federal Reserve meeting, released last night, indicated that the American central bank has not fixed a specific path for its monetary policy, remaining highly reactive to economic trends.
Notably, Wall Street showed resilience despite these developments, with the Dow Jones and the S&P 500 achieving new all-time highs in last night’s trading session. Following a dip on Monday, the yield on ten-year U.S. Treasury bonds is recovering, surpassing 4.30%, while the equivalent German bonds remain relatively stable at 2.18%.
Additionally, a divergence was noted yesterday between German Bunds and French OATs, with the spread widening to 87 basis points, marking its worst performance since May 9. The dollar has also strengthened as Treasury yields rise, reflecting investor sentiment that Trump’s trade policies may lead to inflation due to increased import costs. Consequently, the euro has climbed back to approximately the 1.05 level against the dollar.
On the energy front, the oil market appears largely unaffected by the recent ceasefire in Lebanon, following two months of conflict between Hezbollah and Israel. Brent crude has seen a modest rise of 0.3%, nearing $73, while West Texas Intermediate (WTI) crude has gained 0.2%, reaching $68.9.