CAC40: up slightly, driven by Kering

(CercleFinance.com) - The Paris Bourse climbed 0.
2% this morning to around 8045 points, driven in particular by Kering (+5.6%) and Edenred (+2.6%).

Buoyed by technical buybacks and hopes of an imminent upturn in European growth, the Paris market has posted a solid performance since the start of the year, with a gain of over 8%, outperforming the S&P500, which only gained 3% over the same period.

At the same time, the STOXX Europe 600 index has been racking up all-time highs for the past month, as has the German DAX, which has already gained more than 10% this year.

The US consumer price index (CPI) for January, due out at 2.30pm, will nonetheless be carefully studied against a backdrop of fears of persistent US inflation, likely to lead the Fed to ease its monetary policy.

According to the consensus, the average of economists' estimates points to an annualized figure of 2.9%, the same as in December, while the core CPI inflation index is expected to come in at 3.1%, marking a slight slowdown on the previous month (+3.2%).

This report will not yet be affected by the implementation of customs surcharges, but subsequent ones could be if Donald Trump's recent protectionist measures against Canada and Mexico are maintained.

"These two countries supply 44% of US food imports (to the tune of $85 billion), and food accounts for 13.5% of the CPI", point out Oddo BHF analysts.

Because of the new US President's interventionism on the trade front and its potentially inflationary effects, the evolution of monetary policy continues to worry investors, who no longer expect the next rate cut before July.

This means that the Federal Reserve would skip its March, May and June meetings, an approach confirmed yesterday by Chairman Jerome Powell, for whom there is no urgency to cut rates.

It's hard to imagine that the CPI figures will tip the balance one way or the other, given that FOMC members are not only waiting to see further progress on disinflation, but also prefer to be patient while they assess the economic impact of Trump's trade policy", comments Michael Brown, strategist at Pepperstone.

During his hearing before the Senate Banking Committee, the Fed boss noted that inflation had "significantly" eased over the past two years, but also admitted that it remained at relatively high levels.

"Knowing that our approach today is less restrictive than before, and that economic activity remains solid, we don't need to rush to adjust our policy", he declared.

Jerome Powell is due to continue his hearings before US lawmakers today, but this time before the House Financial Services Committee.

After yesterday's small fluctuations on Wall Street, futures on the major New York indices are currently pointing to a stable or even slightly down opening on Wall Street, but consumer price statistics (CPI) could change the picture.

The latest consumer price figures are also likely to have a knock-on effect on the dollar, as are US bond yields.

Meanwhile, the markets have taken note of the latest monthly business survey published by the Banque de France (BdF). The BdF expects economic activity in France to grow slightly in the first quarter.

Based on the results of its survey, supplemented by other indicators, the institution estimates that growth in France should be between 0.1% and 0.2% over the first three months of the year.

On the bond front, the yield on 10-year Treasuries tightened yesterday to 4.54% in the wake of Powell's testimony in Washington. The Bund is at 2.44%, compared with an OAT of 3.16%.

The euro remains broadly stable against the greenback, at around $1.037.

On the oil market, crude oil prices regained some ground after the technical rebound that began at the end of last week. Brent crude gave up 0.8% to $76.2 a barrel.

Gold continued to suffer from profit-taking after its series of absolute highs in recent sessions, dropping 0.6% to $2,890 an ounce after briefly breaching the $2,900 mark yesterday.

In French company news, Carrefour announced its intention to acquire the shares held by minority shareholders in its Brazilian subsidiary, Grupo Carrefour Brasil, and to delist it from the São Paulo Stock Exchange through a share merger.

TotalEnergies and India's state-owned Gujarat State Petroleum Corporation Limited (GSPC) announced the signing of a 10-year long-term sales agreement, starting in 2026. Under this agreement, TotalEnergies will deliver 400,000 tons or 6 cargoes per year of Liquefied Natural Gas (LNG) to GSPC.

Finally, Casino announces that the Companies Chamber of the Amsterdam Court of Appeal has approved its compulsory buy-out procedure to acquire the shares held by minority shareholders in Cnova.

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