Cholet Dupont: “the gap is widening between European stock markets and Wall Street”

“The performance differential continues to widen between the European stock exchanges and Wall Street and within the euro zone between the CAC 40 index and its peers, the latter still being weakened by the luxury sector whose catch-up is suspended on the return of the Chinese consumer which is somewhat hypothetical at this stage”, says Michel Douin, portfolio manager at Cholet Dupont Oudart.

Several factors explain this gap: the growth dynamic, clearly in favor of the United States, the political instability in Germany and France, which weighs on the confidence of economic agents and the escalation of the conflict in Ukraine which increases the cost of energy and penalizes the European manufacturing sector.

The situation is also deteriorating in services and some observers are now favoring a 50 basis point cut in the ECB's key rates at the December meeting instead of 25 in order to curb the economic weakening within the euro zone. .

The election of Donald Trump and his pro-business posture also consolidates the more favorable momentum on the American markets even if expectations for 2025 are relatively high and this supposes the relay of the entire American rating and not the unique impulse of technological stocks.

Finally, the appointment of the more moderate Scott Bessent as Treasury Secretary was well received. In this context, the S&P 500 posted a weekly gain of 1.7%, the Stoxx 600 1.06% while the CAC 40 lost another 0.2%.

On the value front, Nvidia's good publication had no real influence on the trend. Note the good figures from Walmart, the rebound of Tesla in connection with the study of a simplification of regulations on autonomous vehicles and the official request from the Department of Justice to Google to separate from Chrome. The euro hits a new low at $1.042 while Brent and gold rebound to over $75 per barrel and nearly $2,700 per ounce respectively.