The Paris Stock Exchange is up sharply, largely supported by the rebound on Wall Street, which should continue this afternoon. The S&P 500 rose 2.6% on Monday, its best performance since July 27, mainly supported by the feeling that the US Federal Reserve could be less aggressive in its next rate hikes.
Mid-session, the Bedroom 40 rose 3.46% to 5,994.91 points after a peak at 6,001.38, unprecedented since September 22, the day before the presentation of the British “mini-budget”. The volume of business is relatively substantial with 1 billion euros exchanged. The contracts future on the three main American indices show increases of between 1.4% and 2.1%.
Relaxation on the interest rate markets
The sharp slowdown in US manufacturing growth gives hope that the cycle of Fed rate hikes is beginning to bear fruit. ” In a way, this is the opposite of the ‘good news is bad news’ phenomenon of the past few weeks, when strong data was seen by investors as providing more scope for the Fed to continue its rate hikes.explains Jim Reid, of Deutsche Bank. This time it’s the opposite with the index [ISM] September stood at 50.9 (vs. 52 expected), its lowest level since May 2020, when the economy was still suffering the effects of the lockdowns. “, he adds.
Reinforcing the feeling that central banks could reduce the scale of their interventions, the Bank of Australia raised its key rates by 25 basis points to 2.6% this morning, where the market had been expecting a rise of 50 points. basic. Meanwhile, the turmoil that rocked UK markets on the announcement of unfunded tax cuts eased after the government abandoned plans to cut the top tax bracket. The yield on the 10-year gilt eased 17 basis points to 3.79%, while the pound fully erased its plunge against the dollar.
The yield on the US 10-year bond eased 7 basis points to 3.5834% after briefly crossing the 4% mark last week. That of the German Bund of the same maturity, which serves as a benchmark in the euro zone, fell by 10 basis points to 1.80%.
Growth values in the spotlight
Thales except, all the components of the Cac 40 are progressing, starting with growth stocks such as technology or luxury. STMicroelectronics increased by 4.8%, Capgemini by 5.2%, Dassault Systems by 3.1%, Kering by 6.2% and LVMH by 4.8%.
The great cyclicals also rise in the image of Schneider-Electric (+5.2%), Great (3.9%) and Saint Gobain (+4%). The manufacturer is said to be about to sell Jewson, its British building materials distribution subsidiary, which could earn it more than 1 billion pounds sterling, according to sources cited by Bloomberg.
Conversely, M6 10% drop. RTL, a subsidiary of Bertelsmann, has given up on its plan to sell its controlling stake in the French channel after the failure of the latter’s merger project with TF1.
Sodexo increased by 4.5%. Barclays raised its recommendation on the title of the collective catering group from “underweight” to “overweight” and raised its price target from 81 to 90 euros.