Paris Stock Exchange experienced a notable 1.3% rise, with the CAC40 index exceeding 7,300. European markets, including Euro Stoxx50, also gained momentum, influenced by significant increases in major stocks. Meanwhile, Wall Street showed little movement, awaiting insights from the Federal Reserve on inflation. US unemployment claims decreased, and producer prices rose modestly. In Europe, GDP growth concerns persist, alongside mixed bond market performances. Corporate updates include Thales’ growth targets and significant contracts for Technip Energies and Schneider Electric.
Paris Stock Exchange Surges with Strong Gains
The Paris Stock Exchange has recorded its best performance of the week, climbing by 1.3%. The CAC40 index has surpassed the 7,300 mark, a level few traders anticipated earlier today.
European Markets Rally Ahead of Key Economic Indicators
The Euro Stoxx50 has also shown impressive gains, rising by 1.9%, significantly boosted by a 6% leap from ASML, a 5.5% increase from Siemens, and a 4.6% rise from Kering. This upward momentum is timely, coinciding with the upcoming ‘three witches’ session, which propels stock markets into positive territory for the week, reflecting a 0.5% increase and mitigating losses from the previous month.
Meanwhile, Wall Street remains in a phase of limited movement, with indices fluctuating within narrow bands since Monday. This ‘algorithmic straitjacket’ mode seems aimed at maintaining US indices at their peak ahead of December’s expiration. For the third consecutive session, there has been no clear trend across the Atlantic; the Dow Jones is stable, while the S&P500 and Nasdaq have dipped slightly by 0.1% to 0.2%. However, there is potential for an upward shift this evening at 8 PM, depending on the Federal Reserve’s statement regarding inflation and the economy’s resilience.
An increase in stock values between 8:01 PM and 10 PM may be possible if interest rates begin to ease, with recent statistics from the Department of Labor indicating producer prices rose by 0.2% in October compared to September. Excluding food, energy, and commercial services, this figure increased by 0.3%. On an annual basis, producer prices saw an acceleration in growth, climbing from 2.4% to 3.5% when adjusted for the same exclusions.
The Department of Labor has also reported a decrease in new unemployment claims, with 217,000 claims filed last week, down by 4,000 from the previous week. The four-week moving average, which provides a clearer view of trends, is now at 221,000, down by 6,250. Additionally, the number of individuals receiving benefits has dropped by 11,000 to 1,873,000 as of the last week of October.
European markets have faced challenges due to concerns over economic activity, with recent GDP figures for the eurozone unlikely to offer reassurance. The region’s GDP increased by 0.4% in the third quarter, aided by the Olympic Games in France and a rebound in German consumption—factors not expected to be sustainable. Industrial production in the EU has decreased by 2% in September, heavily influenced by weaker performances in France and Germany.
Minutes from the last European Central Bank (ECB) meeting are expected to confirm lower-than-anticipated inflation and highlight risks to economic activity, without suggesting that a 50 basis point rate cut in December is a central scenario. In currency markets, the Euro has rebounded intraday, rising from 1.0497 to approximately 1.0565/70, signaling a potential end to the recent dollar rally.
In the bond market, 10-year T-Bonds have eased by 2.8 points, settling at 4.425%, down from a high of 4.4880% earlier in the week. The German Bund has improved by 3.7 points to 2.35%, while French OATs have decreased by 5 points to 3.0950%. Italian BTPs have also seen a drop, moving down by 7 points to 3.563%.
In corporate news from France, Thales has outlined new objectives for the 2024-2028 period, targeting an average annual organic growth rate (CAGR) of 5-7%, driven by broad growth across all sectors. Technip Energies has announced a significant contract win, in collaboration with SBM Offshore, for a floating production, storage, and offloading unit (FPSO) for TotalEnergies in Suriname. Additionally, Schneider Electric is set to increase its stake in Planon to take a controlling interest of 80% in the French software publisher specializing in smart building management.