The star of the Paris Stock Exchange is fading. However, the other European financial centers shine. Wall Street is shining. At the close of the last session of the year, Tuesday December 31, the CAC 40 showed a 2024 balance sheet down 2.15%, to 7,380 points. What a feeling of waste!
In the first half, following a year 2023 up more than 16%the flagship index of the Paris stock market broke records. In May, he crossed the 8,000 points for the first time in its history. The CAC 40 reflects the performance of the shares of 40 major French companies. In June, it showed an increase of more than 6% since January 1.
Before the summer, Emmanuel Macron announced the dissolution of the National Assembly. It's radical, the fall is brutal. The Paris Stock Exchange lost what it had gained.
Comparison is difficult with others
The other European stock markets are doing better: +6% in London, +13% in Milan, +14% in Madrid. And the German DAX in Frankfurt is even doing very well, ending 2024 up almost 19%. For its part, Paris finished in the red. It would not be entirely honest to blame political turmoil for everything. Despite the spring records, the Paris Stock Exchange was already losing ground on its European counterparts.
The Frankfurt Stock Exchange was notably driven by the great performance of SAP, the German leader in software design. For Paris, the luxury brands which largely make up the CAC 40 have been badly hit, with the exception of Hermès which is doing very well. In the pharmaceutical sector, Sanofi did less well than the Danish laboratory Novo Nordisk. In the semiconductor sector, the Dutch ASML has surpassed STMicroelectronics, in great difficulty. The car manufacturer Stellantis collapsed after a record 2023.
When the dissolution of the National Assembly occurred, observers had already noted a slowdown in the French market. This decision made the situation worse. The political chaos, the absence of a budget and a path to exit the deficit as well as the uncertainty have put off investors.
Wall Street in great shape
On the other side of the Atlantic, conversely, all the lights are green. Donald Trump promised to lower business taxes, investors are delighted. Wall Street performs well and far surpasses the European markets in terms of quotation and value.
The New York Stock Exchange relies on the exceptional results recorded by the “Magnificent Seven“, the name given to the American tech and AI giants. Google, Amazon, Meta, Apple, Microsoft, Tesla and Nvidia (which grew by 170% in 2024) are part of this club. The performance of these companies make the American market particularly attractive, money attracts money The French oil company TotalEnergies announced this year that it was studying the possibility of being listed on Wall Street. The valuation of shares is much higher there. than here in Europe.
A hope of recovery in 2025 for the CAC 40?
The French political and economic situation must be resolved. During his vows, Tuesday December 31, Emmanuel Macron spoke of attractiveness, collective pulling together, the need for stability and compromise. But not everything depends on France.
The European Central Bank will continue its policy of lowering interest rates. The weakness of the euro against the dollar could promote French and European exports. China announces a major recovery plan, which could be good for French trade, particularly luxury goods.
We should not forget French companies – 2024 nuggets of the CAC 40 – in dynamic sectors. The Accor hotel group made +35% on the stock market over one year, more than 30% for Schneider in energy and Safran in defense and aeronautics. Saint-Gobain in construction materials and EssilorLuxottica in health complete the top 5 companies that are thriving and can make the Parisian market shine in 2025.
Read more
