CAC40: back to within 1% of its records, in the wake of luxury goods and DAX

(CercleFinance.com) - The Paris stock market accelerated to +1.
4% at 8,170, less than 1% from its all-time high.
The Frankfurt stock market did even better, with +1.9% at 22.830, 0.4% off its recent record high of February 18, in the wake of Siemens Energy.

The CAC40, now trading at 8,135 (+1.1%), was driven by luxury stocks (Kering, LVMH +3%) and 2024 favorites Schneider Electric (+3.7%) and St Gobain (+3.4%).... in the hope that Germany will give itself the means to revive its economy, by spending on infrastructure.

On the other hand, Stellantis' results (see below) are being punished: the stock is down by almost 5%.
Confidence is generally back on the markets just a few hours before the publication of Nvidia's eagerly-awaited results in the United States, shortly after 10 p.m. (this is the last of the 'Magnificent 7' to publish its accounts).

For the past ten days or so, the European and American equity markets have been struggling to find a clear direction, torn between hopes of a peace agreement in Ukraine and growing uncertainties about the global economy... but every little air pocket is still a buying opportunity.

As a sign of traders' questioning, the S&P 500 index last night posted its fourth consecutive session of declines, a series unseen since the start of the year.
As for the Nasdaq Composite, it has just suffered losses in excess of 1% over the last three sessions, an event not seen since last August: a "pleasant surprise" from Nvidia would - ideally - enable it to make up lost ground.
Enthusiasm for AI-related stocks has waned of late, due to the unexpected emergence of China's low-cost DeepSeek application and rumours of a downward revision of Microsoft's investments in the field.

In fact, it's the chipmaker's outlook that will be most closely watched, with analysts keen to know whether the Californian group can maintain its gross margin of over 75%, at a time when competition in the sector is clearly intensifying.

Given that Nvidia alone accounts for 8% of the Nasdaq 100 index and over 6% of the S&P 500, its performance should have a major influence on the stock market over the next few days.

According to the professionals, the options market is forecasting a volatility of 8.5% in its share price on both the upside and the downside, which means that the market's reaction is likely to be spectacular (but when 'publications' are highly anticipated, they sometimes end up as a 'non-event').

Looking beyond the results, investors will continue to monitor the economic situation in Europe and the USA, even if there are few statistics on today's menu.

However, the US weekly new home sales and oil inventories figures are on the agenda.

On the foreign exchange market, the euro is relinquishing some of its gains, falling back below 1.05 against the dollar (-0.3% to 1.0485) in the wake of the disappointing statistics of recent days, which have reinforced the prospect of Fed action.

According to the FedWatch barometer, a majority of traders (53.7%) now expect a further rate cut in June, compared with 48.8% previously.

The bond market rallied as a result, with the yield on 10-year Treasuries now below 4.30% (unchanged on Wednesday), a low for over two months.

The trend of risk aversion is much less evident in Europe, where the yield on 10-year German Bunds is easing more modestly (-1.2Pts), to 2.44%, while the OAT for the same maturity is at 3.1650% (-2.8Pts): the OAT/Bund spread has fallen back below 73Pts.

With rates easing, gold is stabilizing at around $2,920 an ounce, following the new highs set on Monday (and a dip to $2,898 on Tuesday evening).

Oil prices are stagnating near recent lows, a few hours before the release of US inventories. North Sea Brent is up 0.2% at $73.2 a barrel.

Stellantis announced this morning that it generated net sales of 156.9 billion euros last year, down 17% on 2023, with net profit down 70% to 5.5 billion euros for the year, with operating margin halved.

Worldline reports net income, Group share (RNPG), on a normalized basis, down 16.8% to 434 million euros for 2024, or 1.53 euros per share, and free cash flow down 43.4% to 201 million.

Danone reports recurring EPS for 2024 up 2.5% to 3.63 euros, with recurring operating margin up 39 basis points to 13%, "while continually reinvesting in future growth".

Lastly, Interparfums has announced a 10% increase in net income, group share (RNPG) to 129.9 million euros for 2024, as well as a virtually stable current operating margin (+0.1 points) to 20.2% on sales up 10% to 880.5 million.

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