CAC40: up timidly in a climate of uncertainty

(CercleFinance.com) - The Paris Bourse gained 0.
26% at the close, to 7255 pts, driven by Safran (+2.5%), Saint-Gobain (+1.9%) and Stellantis (+1.8%), the latter attempting to rebound from its previous day's plunge (-6.3% following the announcement of the departure of Carlos Tavares, its CEO).

The Paris index has to contend with persistent political and budgetary uncertainty in France, and investors are keeping a cool head in the face of the latest developments at the National Assembly, where the Barnier government could be living out its final days as two motions of censure come up for discussion tomorrow.

While the Prime Minister decided yesterday to use the 49.3 to push through his Social Security financing bill, Marine Le Pen, president of the far-right group in the Assembly, announced that her group planned to vote in favor of the motion tabled by LFI.

While analysts fear a prolonged period of political turbulence, the current impasse raises fears for the even more crucial issue of the country's budgetary situation and a potential spike in borrowing costs.

The formation of a new government with broader support is likely to be very difficult", warn Commerzbank's teams.

"Indeed, the center does not have a majority, and a compromise between it and the more moderate parties of the left-wing spectrum is likely to be difficult to find", worries the German bank.

All this suggests that the consolidation of French public finances will be very slow, all the more so as there will be no appreciable upturn in the economy", concludes the German bank.

In addition to the trade war looming in the wake of Trump's election, the conflict in the Middle East and Ukraine, a new front of geopolitical uncertainty emerged today: the South Korean president declared martial law... a measure contested by parliament.

From an investor's point of view, the big question is whether this decision is linked to an imminent threat from North Korea", reacts Mark Williams, at Capital Economics.

"But there is little to suggest that such a threat exists, other than the declaration itself", moderates the analyst.
On the currency markets, the euro is broadly stable against the greenback, at $1.050/E.

Brent crude oil prices are up +2% at $73.5, two days ahead of the OPEC meeting.

Analysts at DeftHedge, a specialist in currency and commodity risk management, nevertheless note that black gold prices "remain stuck near key support levels" and that "fundamentals still argue for a long-term price decline".

On the bond front, 10-year US Bunds are trading at 4.21%, while German Bunds are stable at 2.04% and OATs at 2.892%.
The only figure of the day concerned job openings ('JOLTS'): they rose slightly in October in the United States, according to the survey published this Tuesday by the Department of Labor.

The number of job openings reached 7.74 million in October, compared with 7.37 million in September.

According to Washington, the most dynamic sectors were professional and business services (+209,000), accommodation and food services (+162,000) and information (+87,000), while the federal administration published 26,000 fewer offers.

Year-on-year, the number of job openings nevertheless fell by 941.000, having reached 8.68 million in October 2023.

In French company news, Edenred has announced that it is extending its share buyback program to up to 600 million euros (from 300 million) over the next three years, with the aim of cancelling the shares bought back.

The company has also announced that it has finalized the acquisition of IP's energy card business, an operation that will enable it to become the second-largest player in the Italian market.

Sanofi plans to invest around one billion euros in the construction of a new insulin production site based in Beijing, according to official information relayed on Tuesday.

TotalEnergies, Aramco, and SIRC (Saudi Investment Recycling Company) announced the signing of a joint development agreement to evaluate the possibility of building a sustainable aviation fuels (SAF) plant in Saudi Arabia.

Finally, Legrand announces the acquisition of Power Bus Way, a leading North American specialist in Cable Bus power busbars, mainly for data centers.

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