The CAC 40 plunged during this second session of the year. The Parisian index was pulled down by the luxury and automobile sectors. These large caps were particularly shaken by the information coming from China and the United States.
The market trend
The last session of the week looked like a long torture for the Paris Stock Exchange. The French stock market has never been able to recover or hope to approach balance. There will have been manufacturing activity in the United States (49.3%, compared to 48.4% in November) to stop the bleeding for a few minutes, but the stock market had already plunged for a long time.
Like the day before, luxury sank because of the Chinese markets which continued a second gloomy session. During this session, it was not just this sector that was struggling since automobiles, steel and spirits were pulling the CAC 40 down. The large capitalizations of the main Parisian index were not at the party this Friday.
Stellantis is no longer part of the new list of clean vehicles that benefit from tax credits in the United States. For their part, Pernod Ricard and Rémy Cointreau are also affected by the declarations of the Director General of Health of the United States, Doctor Vivek Murthy, who wishes to put warning labels on alcohol bottles because of the risks of cancers. All this news has therefore pushed the CAC 40 to slide below the symbolic bar of 7,300 points.
On the index side in France and around the world
| CAC 40 | – 1,53% | 7 280,68 points |
| SBF 120 | – 1,51% | 5 516,78 points |
| DAX | – 0,59% | 19 909,12 points |
| FTSE 100 | – 0,41% | 8 223,98 points |
| Nikkei | / | Closed until Monday |
| Dow Jones* | + 0,43% | 42 572,51 points |
| Nasdaq* | + 0,93% | 19 461,07 points |
| *index stopped at the close of European stock markets | ||
Fact of the day
Joe Biden announced this Friday that he was blocking the takeover of US Steel by the Japanese giant Nippon Steel: “It is my responsibility to block foreign ownership of this vital American business. US Steel will remain an American company.”
The American president, in office until the inauguration of Donald Trump on January 20, added that he “would never hesitate to act to protect the security of this nation and its infrastructure and the resilience of its supply chains.” Joe Biden had already been unfavorable to the takeover of the American steel company even though the country is the world’s largest importer.
This blockage could create tensions with Japan as the two governments have been discussing this merger for more than a year. In a statement, the metalworkers’ union said it “grateful” of this decision of “maintain a strong steel industry in the country”. For its part, US Steel did not react, but was in favor of this takeover. The company cited this merger as a way to compete with China, the world’s largest steel producer.
Values in sight
The Top
Energy stocks are the main winners at the start of the year. On the European and American markets, oil and gas companies were particularly sought after this Thursday. Today, this is still the case since GTT is the second progression of the SBF 120 with an increase of 3.72%. On their side, Esso close behind the naval engineering company (+ 3.27%) while Total Energies is at the top of the CAC 40 (+ 0.50%).
GTT, a world leader in the manufacturing of liquefied natural gas (LNG) storage and transportation systems, benefits from the cessation of Russian gas deliveries to Europe via Ukraine. Indeed, the contract, concluded in 2019 before the start of the Russian invasion in Ukraine, expired and was not renewed by the Ukrainian government.
Despite the sanctions against Russia, the Old Continent still used this solution to avoid an energy shortage in many countries. From now on, Russian gas can only pass through the TurkStream pipeline to supply southeastern Europe. In this context, the French company should take the opportunity to increase European imports of LNG to compensate for the end of a third of Russian deliveries to Europe.
Le Flop
The luxury sector is not starting 2025 under the best auspices with a second session in the depths of the indices. Indeed, Dry finishes bottom of the CAC 40 with a plunge of 4.88%. These competitors were not more efficient since LVMH 3.79% shot, Hermes falls by 2.78%, Christian Dior fell by 3.58% while L’Oreal drop of 1.80%. Luxury is still suffering from the poor performance of Chinese markets.
This Thursday, manufacturing activity disappointed investors and led to the worst first session of the year since 2016. This Friday, they were not more optimistic since the Shanghai and Shenzhen stock indices respectively lost 1 .57% and 1.89%. Worse, ten-year bond rates fell below the 1.6% threshold for the first time in its history.
To add to this ambient gloom for luxury in China, spending on the Chinese island of Hainan, known for its luxury boutiques and seaside hotels, fell by 29.3% in 2024. Bad news for luxury brands which had invested heavily in this province after the end of the health pandemic.
Quote of the day
“What is needed is a fundamental cultural change at Boeing, focused on safety and quality rather than profits. This will require sustained effort and commitment from Boeing, as well as continued oversight from us. »
Mike Whitaker, the head of the FAA, the American regulator of the aviation sector, spoke about the difficulties encountered by Boeing in a blog this Thursday evening. The American aircraft manufacturer, number two in the world behind Airbus, has been experiencing production quality problems as well as slowdowns in its assembly line for many months.
The agenda for Monday January 6
For Monday’s session, it will be necessary to monitor France’s composite PMI index for the month of December. It combines the purchasing managers’ indices for manufacturing activities and those for services. Across the Rhine, investors will be attentive to the first inflation estimates in December. They will also await automobile market figures for the last month of 2024.
