Welcome to Paris: Where Stocks Dance and Trump Romances!
(BFM Bourse) – The Paris Stock Exchange has shaken off its existential crisis and is back on the rise the day after a session that resembled an episode of *Wipeout*! The CAC 40 has climbed back over 7,400 points like a toddler on a climbing frame, eagerly awaiting its parents’ verdict from the Fed, who are reportedly set to announce a rate cut this Thursday evening.
Now, let’s be honest, after a volatile session linked to Donald Trump’s thrilling return to the political arena, our resilience was tested more than a contestant on *Who Wants to Be a Millionaire?* But fear not! The CAC 40 closed up a cheeky 0.76% at 7,425.60 points, as if to say, “I fumbled but I’m back, baby!” Meanwhile, in Frankfurt, the DAX 40 rebounded a full 1.7%, stubbornly ignoring all political drama like a teenager avoiding their parent’s questions about their weekend plans.
But what are investors really pondering? Well, apparently, everyone is trying to decipher the enigma that is Donald Trump’s presidency. The man is as unpredictable as a cat on a hot tin roof! Berenberg mentions that this time around, Trump’s victory isn’t a head-scratcher. As for the advisors? They’re reportedly more prepared than a Boy Scout with a Swiss Army knife.
What’s Cooking in the Market? 🍳
As Europe braces for the commercial rollercoaster that is Trump, analysts at a German bank are ringing alarm bells, warning that this shift may bring a storm cloud over Europe’s economic forecast. The current buzz? Investors are waiting on the edge of their seats for tonight’s Federally-sanctioned revelation. Will there be a rate cut of 25 basis points? Most think so, but let’s keep an eye out for Jerome Powell’s cryptic comments. It’s the financial equivalent of reading tea leaves!
And speaking of excitement, let’s highlight some stars of today’s session! Arcelormittal led the charge, rocketing up 6.7% thanks to stellar performance indicators that made investors feel giddy, like finding a 50-Euro note crumpled in your pocket! Luxury stocks are also on the rise, giving both fashionistas and investors something to smile about, with Kering, Hermès, and LVMH all seeing increased value. It’s like a high-stakes fashion show, darling!
But it’s not all glitz and glamour—sinking to the bottom of the CAC 40 is Legrand, which suffered a 7.3% decrease. Must be a tough day for them… like showing up to a black-tie event in gym shorts! Then we have Air France-KLM, plunging a whopping 10.5% after announcing that their books weren’t quite what they hoped. Higher costs? Sounds like someone didn’t pay attention in budgeting class!
Riding the Euro & Oil Waves 🌊
In the broader markets, the euro is enjoying a slight breather against the dollar, gaining 0.6% to 1.0791 dollars after a rough patch. Picture it like a delicate soufflé rising back to form after a kitchen mishap! And after being battered about and tossed like a salad, oil has found a little color, with Brent crude rising 0.5% to $73.30 per barrel. A small victory—let’s celebrate with some overpriced champagne!
So, what’s the takeaway from today’s market escapade? While uncertainty looms larger than a giraffe in a living room, and political manoeuvres play out like a soap opera, some stocks are soaring while others are crashing. Whether you’re an investor or merely an innocent bystander, welcome to the wild and wacky world of finance; hold on tight—it’s bound to be a bumpy ride!
Sabrina Sadgui – ©2024 BFM Bourse
(BFM Bourse) – The Paris Stock Exchange returned to an upward trend the day after a particularly volatile session. The CAC 40 is making its return above 7,400 points, while awaiting the verdict from the Fed, which should announce a rate cut this Thursday evening.
The Paris Stock Exchange is getting back into working order the day after a volatile session linked to the market reaction to Donald Trump’s victory in the American presidential election.
The CAC 40 closed up 0.76% to 7,425.60 points, an increase which allowed it to erase the delay conceded on Wednesday. Note that in Frankfurt, the DAX 40 rebounded by 1.7% at the close, ignoring political uncertainty in Germany.
The market continues to assess the repercussions of Donald Trump’s return to the White House next January.
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“Trump remains unpredictable. It is therefore very difficult to predict which of his almost innumerable and not always coherent electoral promises will actually be implemented. But unlike 2016, the electoral success of Trump and his team is not a surprise. His advisors are prepared,” Berenberg explains.
“For Europe, the return of Donald Trump to the White House represents considerable commercial and geopolitical uncertainty, which will have a negative impact on growth in Europe,” adds the German bank.
Investors are especially awaiting, this Thursday evening, the outcome of the meeting of the American Federal Reserve (Fed). A rate cut of 25 basis points (0.25 percentage points) is widely expected by investors.
But the market will try to watch for the slightest comment from its president, Jerome Powell, which would make it possible to detect clues for the future. Investors particularly fear that the expansionary and inflationary policy desired by Donald Trump will give the Fed less room to maneuver to lower its rates.
Arcelormittal and luxury at the party
In terms of values, Arcelormittal finished at the top of the CAC 40 (+6.7%). The steelmaker delivered free cash flow and gross operating profit significantly above expectations in the third quarter
Luxury was also well oriented, benefiting from a favorable cross-reading of better than expected results from Tapestry (+4.4% on Wall Street), the parent company of Coach but also from Ralph Lauren (+5.4 % also on Wall Street). Kering gained 4.2%, Hermès gained 3.1% and LVMH rose 2.6%.
Conversely, Legrand finished bottom of the CAC 40 with a decline of 7.3%. The industrial group was sanctioned after delivering results significantly below expectations for the first nine months of its 2024 financial year.
Excluding the CAC 40, Air France-KLM plunged 10.5% after publishing third-quarter accounts that were degraded and lower than expected, due to higher than expected costs, particularly at KLM.
Trading in Exail Technologies resumed this Thursday with the stock gaining 9%. The Directorate General of Armaments has selected Exail and Thales to supply sixteen underwater drones to the French Navy.
In other markets, theeuro rose slightly against the dollar, gaining 0.6% to 1.0791 dollars, after being battered by the American currency on Thursday (-1.85%). The election of Donald Trump pushed up US bond yields, which had the effect of propelling the dollar. This is because his policy risks resulting in more inflation and deficit in the United States.
The oil regains some color. The January contract on North Sea Brent gained 0.5% to $73.30 per barrel while that of December on WTI listed in New York also climbed 0.50% to $72.02 per barrel.
Sabrina Sadgui – ©2024 BFM Bourse
**Interview: Navigating the Market’s Rollercoaster**
**Host:** Welcome to our market insights segment! Today we have with us Marco Rossi, a financial analyst with Berenberg Bank, to discuss the recent upheaval in European stock markets following Donald Trump’s political comeback. Marco, welcome!
**Marco Rossi:** Thank you for having me!
**Host:** It’s been quite a ride for investors lately! The CAC 40 in Paris has made a notable rebound. What factors do you believe contributed to this upswing?
**Marco Rossi:** Well, the market’s recovery can largely be attributed to several key factors. First, we saw solid economic data from China, which boosted investor confidence in sectors sensitive to global trade. Additionally, anticipation around the Federal Reserve’s upcoming rate cut likely encouraged buying as investors look to capitalize on potentially lower borrowing costs.
**Host:** Speaking of the Fed, there’s a lot of speculation about the rate cut announcement later today. How do you think Trump’s victory might influence the Fed’s decisions?
**Marco Rossi:** That’s a great question! Trump’s administration is known for its expansionary policies, which could complicate the Fed’s strategy. While a rate cut might be on the table, there’s a concern that Trump’s inflationary tendencies could limit the Fed’s ability to maneuver in the future. Investors are definitely keeping a close eye on Jerome Powell’s comments after the announcement.
**Host:** It seems like the market is reacting to both the immediate and potential long-term effects of Trump’s presidency. Are there specific sectors or stocks that are benefiting from this new political landscape?
**Marco Rossi:** Absolutely! We’ve seen Arcelormittal surge by a substantial 6.7% due to impressive quarterly performance indicators. Moreover, luxury brands like Kering and Hermès are on the rise as well, driven by consumer sentiment and robust performance in international markets. These sectors are often more resilient in times of uncertainty.
**Host:** However, not all companies are faring well, right? Air France-KLM, for instance, is facing significant declines after disappointing financial results. What’s your take on that?
**Marco Rossi:** Indeed, Air France-KLM’s plunge of 10.5% highlights how sensitive some industries are to economic fluctuations and rising operational costs. Their situation serves as a reminder of the challenges that businesses, especially in the travel and hospitality sectors, face as they navigate post-pandemic recovery intertwined with political uncertainties.
**Host:** It sounds like a mixed bag out there in the stock market. As an investor, what should one take away from the current landscape?
**Marco Rossi:** The message is to stay informed and adaptable. With rising geopolitical tensions and unpredictable shifts in policy, there will undoubtedly be volatility. Diversifying your investments and looking for sectors that tend to thrive under these conditions can be prudent. It’s a thrilling, albeit bumpy, ride ahead!
**Host:** Thank you, Marco, for your insights! It certainly is a chaotic yet fascinating time for investors in Europe. We appreciate your time and expertise!
**Marco Rossi:** Thank you for having me! Always a pleasure to discuss these market dynamics.
**Host:** That wraps up our interview. Stay tuned for more updates from the financial world, and as always, happy investing!
