The Paris Stock Exchange is expected to begin trading on a stable or mildly positive note, with investors awaiting crucial PMI survey results from the eurozone. The CAC 40 futures have seen a slight rise, reflecting a modest bounce from the previous day. Economic challenges persist, particularly in Germany, prompting speculation of potential ECB interest rate cuts. Meanwhile, Wall Street experienced gains, contrasting with European market declines, as the euro remains weak against the dollar and oil prices stabilize.
Market Outlook for the Paris Stock Exchange
The Paris Stock Exchange is anticipated to start the trading day on a stable or slightly bullish note this Friday morning. Investors are adopting a cautious stance ahead of the release of the latest PMI surveys from the eurozone, which will provide crucial insights into economic activity.
As of 8:15 AM, the futures contract for the CAC 40 index, expiring in December, has risen by 14 points to reach 7239.5 points. This indicates a modest increase at the beginning of the session, following a slight rebound of +0.2% that commenced the previous day.
Focus on PMI Surveys and Economic Sentiment
The initial session in Europe will be heavily influenced by the preliminary results of the monthly purchasing managers’ index (PMI) surveys, which assess economic activity within the eurozone. Analysts predict these figures will reflect ongoing economic challenges faced by the region, contributing to the recent downturn of European stock markets relative to Wall Street.
Bruno Cavalier, chief economist at Oddo BHF, notes, “Weak orders, political instability, and tariff threats from Donald Trump suggest that industrial sentiment will not improve.” However, he remains optimistic about the resilience of the services sector.
Given the significant slowdown in Germany’s economy, these statistics could bolster expectations for more aggressive interest rate cuts from the European Central Bank (ECB). Additionally, the afternoon will see the release of the US PMI, which is also anticipated to reveal a divide between industry and services.
“The difference with Europe is that domestic demand is robust enough to offset the weaknesses in manufacturing,” adds Cavalier. The University of Michigan’s consumer confidence index, set to be finalized before the presidential election on November 5, is expected to indicate sustained consumer optimism.
On Thursday, Wall Street closed on a high note, marking a fourth consecutive session of gains for the S&P 500, despite a mixed reception for the quarterly results of AI leader Nvidia, which rose by 0.5%. The Dow Jones increased by 1.1%, the S&P 500 added 0.7%, and the Nasdaq Composite inched up by 0.1%.
In the bond market, the yield on 10-year US Treasury bonds climbed above 4.43% without negatively impacting US stock performance. In Europe, the gap between French OATs and German Bunds has widened further to 79 basis points.
The euro continues to decline against the dollar, trading around 1.0465, reflecting a weekly decrease of about 0.5% against the greenback. In energy markets, oil prices remain largely stable amidst geopolitical uncertainties and concerns regarding global growth. West Texas Intermediate (WTI) crude is holding steady at $70.1 per barrel, while Brent crude is trading around $74.2.
As the week progresses, the CAC 40 is projected to close with a decline of approximately 0.7%, and the Euro STOXX is showing a weekly drop of 0.8%. In contrast, the Dow Jones is on track for a gain of nearly 1% this week, with the Nasdaq up over 1.5% since Monday, highlighting the significant outperformance of Wall Street.