The Paris stock market rallies on “3 Witches” day, with the CAC40 up 0.4% to 7,615 points, ushering in a positive October with around a 1.4% growth. Rising to nearly 7,645, the index has seen over a 6% increase since August’s lows. Meanwhile, Wall Street shows mixed results, and the ECB signals further rate cuts amidst slowing U.S. housing starts. China’s GDP growth slows to 4.6%, while Netflix reports strong quarterly results, impacting market sentiment.
The Paris Stock Exchange is experiencing a resurgence as it approaches the end of the trading session this Friday, often referred to as “3 Witches Day.” This marks a promising conclusion to October, with projections indicating a rise of approximately 1.4% to 1.5% for the month, continuing a three-month positive streak despite the pressure from increasing interest rates and an OAT surpassing 2.91%.
Currently, the CAC40 index has risen by 0.4% to reach 7,615 points, peaking at 7,645. As a result, the index has recorded a weekly increase of 0.5% and has gained over 6% since its dip on August 5.
The Euro-Stoxx50 is also trending upward, gaining more than 0.6% to reach around 4,980 points, following a 0.4% rise in the Dax40, which is nearing its record high of 19,665 points.
In the United States, Wall Street has begun trading with mixed results. The S&P500 shows an increase of 0.2%, while the Dow Jones has declined by 0.4%, having peaked the previous day. The Nasdaq is up by 0.7% to around 18,505, bolstered by a 10% jump in Netflix stock, marking its best performance since mid-October.
However, analysts caution that these gains might be temporary, especially with the presidential election approaching in two weeks. One trader believes it’s wise for investors to consider taking profits at this time.
With the S&P 500 index surging 22% year-over-year, neglecting to secure profits would be unwise, the trader notes.
Earlier in the day, the U.S. Commerce Department revealed a 0.5% drop in housing starts for September, totaling 1,354,000 annualized units, following a 7.8% increase in August. Meanwhile, housing permits, which predict future starts, declined by 2.9% to 1,428,000, and housing completions decreased by 5.7% to 1,680,000, potentially affected by weather conditions in the South.
It’s important to highlight that rising long-term interest rates, which have reached 4.40%, have led to a 17% drop in mortgage applications since the beginning of the month—the worst performance since April 2020.
Investors were not taken by surprise with the European Central Bank’s decision to reduce rates for the second consecutive time. However, they reacted positively to the bank’s shift towards a more accommodating stance, suggesting a possible fourth rate cut in December.
Bruno Cavalier, an economist at Oddo BHF, emphasized the need for the ECB to expedite monetary policy easing to eliminate its restrictive nature in response to the risks to both growth and inflation.
With the ECB meeting concluded, investors are now on the lookout for concrete elements that could steer market trends.
In China, data released by the State Bureau of Statistics indicates that third-quarter GDP growth was 4.6% year-on-year, which, while slightly better than expected, represents a slowdown from the 4.7% growth of the previous quarter.
Market analysts believe that the ongoing earnings season could serve as a significant catalyst for upward movements in stock indices, with keen attention on the quarterly results of companies like American Express, Procter & Gamble, and SLB.
Earlier this week, Netflix’s reported earnings for the third quarter exceeded expectations, prompting its stock to jump by 10% on Friday.
On Thursday evening, Wall Street closed nearly balanced, constrained by tensions in the bond market. Yields for U.S. T-Bonds ‘2034’ eased by 2 basis points to 4.075%, while 30-year bonds dropped by 1.7 basis points to 4.377%. In the Eurozone, OATs declined by 2.3 basis points to 2.9080%, and Bunds fell by 1.8 basis points to 2.186%.
On the commodity front, oil prices are showing signs of recovery following the reported death of Hamas leader Yahya Sinouar. Brent crude has ended the week down 2% at approximately $72.9 per barrel, while U.S. light crude (WTI) has seen a 2.2% drop, trading below $69 on the NYMEX. Lastly, gold has reached new heights, surpassing $2,710 per ounce.