The Paris stock market is expected to open lower due to investor caution following the European Central Bank’s recent rate cut. The CAC 40 index futures dropped, signaling a negative start, despite a modest weekly gain. Investors are now seeking new direction, with earnings reports and a lack of major economic indicators on the agenda. Meanwhile, Chinese GDP growth slightly exceeded expectations but indicates a slowdown. Oil prices are recovering amidst geopolitical developments in Israel.
The Paris stock market is anticipated to start the day in negative territory this Friday as investors prepare to close a week that has seen another interest rate cut from the European Central Bank (ECB).
Around 8:15 AM, the CAC 40 index futures for October delivery dropped 27.5 points to 7557.5, indicating a bearish opening ahead.
As the week comes to a close, the main index registers a minimal weekly gain of under 0.1%. However, it has surged more than 6% since its low on August 5 and is once again approaching the significant milestone of 7,600 points.
The market was largely unfazed by the ECB’s recent rate cut, marking the second consecutive reduction; however, the more dovish stance from the bank, suggesting a potential fourth cut in December, was appreciated by investors.
‘In light of the downside risks to both growth and inflation, the ECB must expedite the easing of its monetary policy to swiftly eliminate its restrictive nature,’ states Bruno Cavalier, an economist at Oddo BHF.
With the ECB’s meeting concluded, market participants will seek out tangible information that could provide fresh momentum.
There are no significant economic indicators scheduled for this final trading session of the week, except for the latest data on U.S. housing starts.
In China, the Gross Domestic Product (GDP) growth for the third quarter registered at 4.6% year-on-year, according to data released by the State Bureau of Statistics (BES) on Friday. While this is slightly above estimates, it indicates a deceleration following the 4.7% growth seen in the previous quarter.
Analysts believe that the upcoming earnings season may act as the next driver for upward movement in stock market indices.
In this context, investors will closely monitor the quarterly results from major U.S. companies like American Express, Procter & Gamble, and SLB, which will be reported at lunchtime.
Last night, Netflix exceeded expectations for the third quarter, both in terms of earnings and subscriber growth, leading to a more than 5% increase in after-hours trading.
Earlier, Wall Street remained relatively stable on Thursday, hindered mainly by significant actions within the bond market.
‘With the presidential election coming up in about two weeks, it’s reasonable to see investors taking some profits,’ suggests one trader.
‘Considering the S&P 500 index’s impressive 22% annual gain at this point, it would indeed be unwise not to,’ he notes.
Expect some volatility during this ‘triple witching’ day, which is marked by the expiration of various options and futures contracts.
On the energy front, oil prices continue their upward trend as Israel reports the death of Hamas leader Yahya Sinouar.
Brent crude has risen 0.4% to $74.75, while U.S. light crude (WTI) has advanced 0.5% above $71.