The Paris Bourse saw a significant drop in early trading, with the CAC40 declining by 1.2%. In contrast, Wall Street opened positively, highlighted by the Nasdaq reaching a record high, despite declines in AMD and Super Micro Computer stocks. Economic data revealed a U.S. GDP growth of 2.8% for Q3 2024 and strong job creation of 233,000 in October. The article also discusses inflation rates and the impact of various economic indicators on European markets.
The Paris market opened lower, registering a nearly 60-point gap between 7,511 and 7,452. The CAC40 index deepened its losses, initially falling by 1.6%, before stabilizing at a 1.2% decline around the 7420 mark, while the Euro-Stoxx50 saw a drop of 1.3%.
In stark contrast, Wall Street began the day on a positive note, with the Nasdaq achieving a new peak of 18,760. This occurred despite significant declines in stocks such as AMD, which fell by 10% following its quarterly report, and Super Micro Computer, which saw a 27% drop, along with minor declines for ASML and Qualcomm.
However, tech giants Google and Amazon posted gains of 6% and 1.5%, respectively, with expectations high as Meta and Microsoft prepare to report their earnings tonight.
Today’s trading session also highlighted several economic statistics, especially those related to U.S. growth metrics.
According to the Commerce Department’s preliminary estimate, the U.S. GDP expanded at an annualized rate of 2.8% in the third quarter of 2024, a decrease from the previous quarter’s rate of 3%. This marks the eighth time in the last nine quarters where growth has exceeded 2%. The increase is primarily due to stronger consumer spending—bolstered by rising credit card balances—alongside higher exports and federal expenditure, even as imports contributed negatively to GDP calculations.
The personal consumption expenditures (PCE) price index indicated a rise of 1.5% unadjusted and 2.2% when excluding food and energy, showing a notable decline from the previous quarter’s figures of 2.5% and 2.8%, respectively.
In a positive development, the private sector in the U.S. added 233,000 jobs in October, significantly surpassing September’s 159,000 and more than doubling expectations of 115,000. This surge is the highest observed since July 2023. Nela Richardson, ADP’s chief economist, noted, “Even accounting for the aftermath of hurricanes, job creation was robust in October. Hiring across the U.S. remains strong and resilient as the year ends.”
Meanwhile, U.S. Treasury bonds saw a slight decline, with 10-year yields easing by 3.5 basis points to 4.243% and the 30-year bond down by 5 basis points to 4.468%.
The latest inflation figures from Germany showed a consumer price index (CPI) increase of 2% in October compared to the previous month, up from 1.6%. German consumer prices rose by 0.4% month-over-month, with the core inflation rate, excluding food and energy, at an annualized 2.9%, slightly up from September’s 2.7%.
France’s GDP growth in volume terms has also shown a moderate uptick in Q3 2024, coming in at 0.4% after a 0.2% increase in Q2, partly spurred by the upcoming Paris Olympic Games.
Further economic updates include preliminary GDP estimates from Germany and the Eurozone, as well as economic sentiment indices from the European Commission.
According to Eurostat’s initial report, GDP increased by 0.4% in the Eurozone and 0.3% in the EU in Q3 2024, driven by strong performances from France and Italy, following Q2 increases of 0.2% and 0.3%, respectively.
European bond markets are facing challenges in responding to this influx of data, leading to upward pressure on yields, with Bunds and OATs rising 3 to 3.5 basis points to 2.364% and 3.11%, respectively, while Spanish Bonos increased by 3.2 basis points to 3.062%, and Italian BTPs surged by 5.3 basis points to 4.612%.
The euro is benefiting from favorable yield differentials, rising 0.35% against the dollar to 1.08550, while the dollar remains stable against both the yen and the Swiss franc. Brent crude oil rebounded by 1%, moving up to $72 per barrel in London after hitting a low of $71.2.
In Paris, quarterly earnings reports continue to roll out, with Schneider Electric, CapGemini, bioMérieux, and M6 reporting their nine-month sales figures, following announcements from Saint-Gobain and Eutelsat the previous evening.