(BFM Bourse) – The Parisian index ended the month of October with a sharp decline. The CAC 40 returned below 7,400 points, weighed down by a drop of more than 1% at the end of the day, which was still very busy with company results. On a monthly basis, the results are even less flattering (-3.74%).
It was a slightly scary Halloween day for the Paris Stock Exchange. Its flagship index, the CAC 40, closed down 1.05%, and ended the month of October below 7,400 points, at 7,350.37 points.
Over one month, the performance of the flagship Parisian index is strongly negative (-3.74%), which this year reinforces the high-risk reputation of the month of October on the stock market.
Please note that the Paris Stock Exchange will be open on Friday November 1st. But first, investors did not have time to get bored with a busy schedule of corporate and macroeconomic publications.
In the United States, inflation data shows that the PCE consumer price index stood at 0.2% over one month in September, and at 2.1% over one year. The underlying core PCE inflation index, (excluding volatile items such as energy and food), increased by 0.3% over one month. Over one year, the index rose to 2.7%, compared to 2.6% expected by the consensus. “Currently, a 25 basis point (0.25 percentage point) rate cut is expected at the Fed's November meeting and today's PCE results online today should hardly change this expectation,” says Bret Kenwell, US markets analyst for eToro.
Weekly applications for unemployment benefits fell by 12,000, falling to 216,000 new registrations, their lowest level since May.
Tensions on the bond market
Inflation was also discussed in Europe. Inflation in the euro zone stood at 2% in October, compared to 1.7% the previous month and 1.9% expected by the consensus, according to Capital Economics.
This has caused a rise in bond rates in Europe over the last two days. The yield on the equivalent 10-year French Treasury bond is moving around 3.13% compared to 3.085% on Tuesday, while that of the same maturity on the German Bund increased from 2.34% to 2.39%. This increase comes at a time when recent statistics (GDP in the euro zone, inflation) have given food for thought to the most “hawkish” (restrictive) members of the European Central Bank (ECB).
On Wednesday, Isabel Schnabel, member of the ECB executive board, and Joachim Nagel, president of the Bundesbank, both called for caution on key rate cuts. “Market expectations of a 50 point (0.5 percentage point) base rate cut by the ECB in December fell from 41% to 20% yesterday,” notes Deutsche Bank.
Investors also continue to keep an eye on the US campaign with just five days until the November 5 election.
“Recent CNN polls showed (Kamala) Harris with commanding leads of five points and six points in the key swing states of Michigan and Wisconsin, although she was still tied with Trump in Pennsylvania.” dot Deutsche Bank.
Société Générale and Pluxee on the honor roll
Investors have also been busy dissecting an avalanche of very mixed results. On the CAC 40, on the disappointment side, BNP Paribas (4.2%) delivered quarterly accounts only in line with expectations, while Totalenergies (-2.9%) disappointed with results penalized by the drop in oil and refining margins.
For its part, STMicroelectronics (-2.9%) did not reserve any unpleasant surprises in the third quarter, but its outlook for the fourth came out below expectations, points out Morgan Stanley.
On the positive side, Société Générale (finally) published solid results in the third quarter, particularly in retail banking in France. The stock closed at the top of the CAC 40 with an increase of 11.3%.
Stellantis gained 3% after reporting revenues in line with (low) consensus expectations.
Excluding CAC 40, Pluxee soared more than 21% after raising its outlook for fiscal years 2025 and 2026 on Thursday, citing “solid” financial performance in 2024 and expressing confidence in the structural growth trends of the market.
Conversely, Spie returned 4.7% due to less robust quarterly activity than expected by the market when Rubis fell by 10.3% after lowering its gross operating profit target for 2024.
Excluding publications, FDJ jumped 7.3% after the long-awaited verdict from the European Commission on exclusive rights.
On other markets, the euro is up slightly against the dollar at 1.0861 dollars. Oil is moving forward a little. The January contract on North Sea Brent gained 0.6% to $72.57 while that of December on WTI listed in New York gained 0.6% to $69.05 per barrel.
Sabrina Sadgui – ©2024 BFM Bourse
