The Paris stock market (-0.25%) has been on a roller-coaster ride since 1pm, but the upside now looks set to prevail as the CAC40 erases 0.8% of the -1% posted this morning, balancing out at around 6,900 points.900 points.

Wall Street failed to shake off its initially hesitant to negative note, with the S&P500 down 0.4%, the Nasdaq down 0.8%, and the Dow Jones down 0.1%.

Although some cheap buybacks are taking place, the CAC40 is still suffering from heavy downgrades on Teleperformance (-9%), BNP Paribas (-3%) and Kering (-2.3%).
The SBF120 is seeing Plastic Omnium disintegrate by -23% (towards 10E) despite a rise in sales.

Buyers were emboldened by ST-Micro (+5.2%) then Carrefour (+4.9%) following the ECB's monetary policy statement, which unsurprisingly validated the scenario of maintaining rates.
Worldline recovered +10.5% to 10.4E, but this was far from erasing the previous day's -59% (with the stock plunging below a historic support level of 15E dating back to mid-December 2014).

The markets were not expecting any "revelations" from the traditional press conference by the institution's president, Christine Lagarde: she said that it was far too early to consider easing rates.

Investors were nevertheless hoping that the central bank would be able to calm the prevailing nervousness triggered by the recent turbulence in the bond compartment.

Following recent economic publications, we believe that the European Central Bank (ECB) now has sufficient arguments to support the idea of a pause in its interest-rate hike cycle", add the strategists at Natixis IM Solutions, who acknowledge that the eurozone economy is "multiplying signals of weakness".

The stock market continues to be buoyed by an avalanche of earnings releases in Paris and the rest of Europe, with figures from BNP Paribas, Danone, Mercedes-Benz and STMicroelectronics.

Beyond corporate news and the ECB, one of the highlights of the session was the publication at 2.30pm of the first estimate of US gross domestic product (GDP) for the third quarter.

U.S. GDP growth for the third quarter of 2023 is "rocketing" at an annualized rate of 4.9% (compared with the 3.8 to 4% anticipated by the financial community, after final Q2 growth of 2.1%).

The Department of Commerce, which publishes GDP and investment figures, points out that the apparent "boom" reflects an increase in inventories, while imports, which are a subtraction in the calculation of GDP, rose.
But consumption remained very vigorous, helped by the $600 billion widening of the deficit in Q3.

Another closely watched variable, the price index for personal consumption expenditure (PCE) rose by 2.9%, after 2.5% in Q2. Excluding food and energy prices, it rose by 2.4%, compared with a 3.7% increase previously.

In another "pleasant surprise", the US Commerce Department reported that orders for durable goods rose more than expected in September, after 2 months of consecutive declines, testifying to the dynamism of business spending.

These orders rebounded by 4.7% last month (vs. +1.5% expected), following a 0.1% decline in August and a 5.6% drop in July, the Commerce Department announced on Thursday.

Non-aeronautical durable goods orders, considered a good indicator of business investment plans, rose by 0.5%, against a consensus of 0.3%.

The number of US jobless claims rose by 10.000 in the week to October 16, to 210,000 from 200,000 the previous week (revised from 198,000), according to the Labor Department.

The number of people receiving regular benefits rose by 63,000 to 1,790,000 in the week to October 2, the most recent period available for this statistic.

US T-Bonds are not reacting in a clear-cut manner, and are even easing (-4 basis points to 4.915%), as the rise in GDP has to be put into perspective due to 'technical biases' that are inflating the overall score.
In Europe, our OATs are easing by -5 basis points to 3.47%, Bunds are shedding -4.6 basis points to 2.841%, Italian BTPs -7.4 basis points to 4.8420%.

The bond markets may be recovering as a result of the situation in the Middle East becoming seriously tense after a series of massive Israeli strikes on the Gaza Strip yesterday.

The greenback is benefiting on the foreign exchange market, with the euro continuing to fall against the dollar (-0.15%), not far from $1.0550/euro.

In French company news, Danone (+3%) now expects full-year sales growth of between +6% and +7% on a like-for-like basis, compared with +4% and +6% previously, with a moderate improvement in current operating margin confirmed.

Atos (+10%) announces third-quarter 2023 sales of 2.59 billion euros, down 8.1% on a reported basis compared with the same period in 2022, including an organic decrease of 3%.

Satellite operator Eutelsat reports sales for its first quarter 2023-24 (to end September) of 274 million euros, down 4.7% on a reported basis and 0.8% on a comparable basis.

TotalEnergies saw its third-quarter adjusted net income fall by 35% to $6.5 billion, where consensus was targeting $6.2 billion, for adjusted Ebitda of $13.1 billion, down 33%.

Finally, Schneider Electric reports third-quarter 2023 sales of 8,789 million euros, up +11.5% organically and +0.1% on a reported basis. The Group reaffirms its 2023 financial target: it is aiming for organic growth in 2023 adjusted EBITA of between +18% and +23%.


Copyright (c) 2023 CercleFinance.com. All rights reserved.