(BFM Bourse) – The Parisian index ends the week with a bang thanks to American employment figures pleading for further monetary easing from the Fed and falling French bond yields. The CAC 40 gained 1.3% Friday evening, and 2.65% over the week.
The Paris Stock Exchange ends the week on a good note. The CAC 40 gained 1.31% to 7,426.88 points this Friday, clearly outperforming the other European indices. Over the whole week, the CAC 40 gained 2.65%.
The progression of the Parisian index was confirmed after the publication of the official American employment report for the month of November. According to this report, 227,000 jobs were created last month in the United States, which is higher than the 220,000 expected by the Bloomberg consensus.
A hope of a rate cut in the United States
The unemployment rate in the United States increased by 0.1%, from 4.1% to 4.2%, but “remains significantly below the 4.4% expected by the Fed (American Federal Reserve) in its September projections”, notes Florian Ielpo, head of macroeconomic research at Lombard Odier Investment Managers.
“Therefore, stocks may find comfort in economic stabilization and the prospect of Fed rate cuts, while interest rates may like this less, given its implications for the future inflation cycle “, continues the specialist.
The probability assigned by investors to a Fed rate cut this month of 0.25 percentage points rose to 86.9% after the publication of the statistic against 71% the day before.
This reassured the Paris Stock Exchange which had already started the day in a good mood. Tensions on French debt have fallen several notches since Thursday, following the fall of the government.
This Friday, the yield on France's 10-year bond fell by 2 basis points (0.02 percentage points) to stand at 2.876%. The spread with the German security of the same maturity, a thermometer of market stress on the French signature, stands at 77 basis points, which is very far from its level of 88 basis points. from Monday.
How can we explain such a decline? Bloomberg mentions the fact that Marine Le Pen, president of the National Rally group in the Assembly, indicated to the agency that a budget could be passed quickly if the next Prime Minister agreed to go more slowly in reducing the public deficit.
“For some, Madame Le Pen's statements concerning the possibility of passing a budget would also have contributed” to reducing the spread, notes Sebastian Paris Horvitz of LBPAM. “But this does not seem obvious,” he adds.
“The market may have feared that there would be a phase of political uncertainty after the motion of censure. However (Thursday evening) Emmanuel Macron indicated that he would remain president and that he intended to appoint a Prime Minister quickly. This shows that “There is still a political movement, which can reassure a little,” judges Alexandre Baradez, head of market analyst at IG France.
The expert also notes that the impact of the tightening of the spread on French equities is “mechanical”. “All investors looked at it as the great barometer of risk so mechanically this creates a buying current on the CAC 40 with perhaps also opportunistic purchases, because the CAC 40 underperforms the other European indices in 2024”, develops Alexandre Baradez .
In terms of values, luxury was at the party. Kering gained 6%, LVMH 3.5% and Hermès gained 3.2%. The rise in their prices is linked to expectations of new stimulus measures in China while an important meeting with the country's economic leaders is due to take place next week.
“The idea that China can do more on stimulus measures carried Chinese stocks this Friday with a ripple effect on luxury stocks,” notes Alexandre Baradez.
Airbus recovered 1.1% after announcing 84 aircraft deliveries during the month of November, which will force the company to work hard in December to meet its annual objectives.
Ubisoft jumped 13.1% on information from the Reuters agency which reported this Friday that the group's shareholders were looking for ways to structure a delisting operation without reducing the control of the Guillemot family.
Derichebourg climbed 10.9% after publishing its accounts for its 2023-2024 financial year ending at the end of September. A publication described as “excellent”, by TP ICAP Midcap.
Among the sharp declines, the Atos title which collapsed by more than 98% while a massive influx of securities, which amounts to tens of billions of units, will occur in the coming days
On other markets, the euro lost 0.3% against the dollar at 1.0558 dollars. Oil is falling. The February contract on Brent from the North Sea lost 1% to 71.34 dollars per barrel while that of January on WTI listed in New York returned 1.2% to 67.45 dollars per barrel.
Sabrina Sadgui – ©2024 BFM Bourse
