CAC40: may end up stable, monthly gain +2.5%, WStreet +0.6

(CercleFinance.com) - The Paris stock market continues its recovery, with a -1% decline this morning to -0.
2% points at 8,090, for a reduced weekly loss of -0.8% (and a monthly gain of +2.5%), while Wall Street reopened up 0.4% and is quietly closing in on +0.6% (same score for all US indices).

This puts an end to a series of 6 consecutive sessions of decline, concluded by a spectacular acceleration in "speculative" asset sales (Nvidia, Microstrategy, Palantir, ARM, Tesla, Broadcom...losing between -6% and -20%), while Trump's latest statements are fuelling fears about global growth.
The Euro-Stoxx50 is also proving resilient, with -0.3% at 5.4555 (-0.5% weekly), while the DAX40 is also holding up well (-0.1% weekly and +5% over the past month).

Yesterday, Donald Trump confirmed that Chinese products would be subject to 10% additional tariffs from March 4 (no date has been set for a 25% hike on products imported from Europe, a scenario that no-one has believed in since last November, as everyone would lose out).

China is therefore the first to suffer customs penalties: its Minister of Commerce has expressed his firm opposition to the US President's decision and announced his intention to adopt countermeasures to protect the country's "legitimate rights and interests".

"For weeks, the stock market has overlooked the impact of the trade war", points out Christopher Dembik, Investment Strategy Advisor at Pictet Asset Management.

Sooner or later, the subject had to come back to the fore," says the analyst.
Asian stock markets were also hit on Friday, with declines ranging by the end of the session from 2.9% in Tokyo to over 3.2% in Hong Kong.

However, investors were reassured by the publication of the much-anticipated PCE index in the United States and the ICP in Germany: data that was expected to be crucial for the path of monetary policy on both sides of the Atlantic, less than a week before the European Central Bank's (ECB) monetary policy meeting.

On the other side of the Atlantic, PCE inflation, the indicator used by the Federal Reserve to monitor price dynamics, came in at +2.5% as forecast (after 2.6% in December).
Excluding food and energy, the Core rate slowed by 0.3 points to +2.6% month-on-month (again, in line with forecasts.

Inflation rate still but in Germany: the consumer price index (CPI) is expected to come in at +2.3% annualized in February, unchanged on January, according to Destatis' preliminary estimate.

But there was also another figure considered crucial in a context of questioning about growth: US household consumption spending fell by 0.2% (this is a surprise) in January compared with the previous month, according to the Commerce Department, while income rose by 0.9% month-on-month (this is also quite far from expectations of +0.6%).

In addition, this morning investors took note of several statistics concerning France.

Over one year, according to Insee's provisional estimate at the end of the month, consumer prices in France rose by 0.8% in February, after +1.7% in January. For the first time since February 2021, the year-on-year change would thus be below 1%.

In addition, French household consumption expenditure on goods fell by 0.5% in volume over one month in January, following an increase of 0.7% in December 2024, according to Insee's seasonally and working-day adjusted (CVS-CJO) data.

On the bond markets, yields continue to ease, with German 10-year sovereign bond yields easing by -1.9Pt to 2.395% and those of their French counterparts remaining virtually stable at 3.136% (-0.6Pt).

The yield spread between the Bund and the French OAT is stabilizing at around 72/73 basis points.

In the United States, the ten-year Treasuries rate - after the 2.30 p.m. stats - remains in the region of 4.254% (-1Pt), still well below that of three-month paper (4.31%), a reversal potentially heralding a recession in the making.

As a result of risk aversion, Forex traders are taking refuge in the dollar, pushing the euro back towards $1.04 (+0.15% to 1.0410 after the day's figures), whereas the single currency was still trading above the 1.05 threshold on Wednesday.

On the oil markets, Brent and US light crude prices are back on the decline: Brent, back above $74 a barrel at midday, is down -0.9% to $73.2.

In news from French companies, Teleperformance (-10%) last night reported adjusted net income, group share of €807 million (vs. €732 million a year earlier), giving adjusted diluted earnings per share of €13.44 (vs. €12.39 in 2023).

Saint-Gobain also reported last night operating income of E4.37 billion (+3.5%) and consolidated net income, group share of E2.84 billion (+6.6%), giving EPS of 5.69 euros (+8.2%).

Casino (-15%) reports net income from continuing operations of 2.17 billion euros for 2024, versus a loss of 2.56 billion the previous year, but adjusted EBITDA down 24.7% to 576 million, reflecting a margin of 6.8% (-174 basis points).

Finally, Oddo BHF reiterates its 'outperform' recommendation on AXA shares, with a price target slightly raised from €40 to €41, in the wake of the insurance company's publication of better-than-expected results for 2024.


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