(CercleFinance.com) – The Paris Stock Exchange has long remained a little amorphous, around +0.3% this morning (around 8,045 points), just enough to end the week in the green of +0.1 or +0, 2%… but the market suddenly changed its appearance after the publication of the ‘PCE’ index.
The CAC40 accelerates and gains +1.1% to more than 8,105 points, helped by Saint-Gobain which gains 6% the day after its quarterly results. Kering also regains some color (+4%) after its recent disappointments while Teleperformance completes the podium of the best CAC performers with a gain of 3%.
On Wall Street, the increase is there: the S&P500 gains +1% and the Nasdaq +2%.
If the results season is in full swing on both sides of the Atlantic, the main event of the session took place at 2:30 p.m. with the publication, in the United States, of the ‘PCE’ inflation index, likely to influence the next monetary policy decisions: it stood at +2.7% in March, compared to 2.5% in February, the underlying rate (excluding energy and food) remaining however at 2.8% one month to the next.
American inflation is therefore a little higher than expected by economists, since those at Jefferies anticipated, for example, rates of 2.6% in raw data and 2.7% in underlying figures.
The Commerce Department also indicates that American household spending increased by 0.8% in March compared to the previous month, while their income increased by 0.5%.
American consumer confidence deteriorated more sharply than initially estimated in April, the final results of the monthly survey from the University of Michigan showed on Friday.
The confidence index finally came out at 77.2, a level lower than the first estimate (77.9) and a clear decline compared to the level of 79.4 reached in March.
It is the component of households’ judgment of their current situation which has deteriorated most significantly, to 79 compared to 82.5 last month.
The expectations component fell to 76 this month after 77.4 in March.
But Wall Street, just like the day before, focuses on the quarterly and is seduced by good surprises like Microsoft (+2.6%) or Alphabet (+10.5%).
The tension falls somewhat unexpectedly on the bond markets with -5Pts on the US ’10 year’ towards 4.655%, -6Pts on the Bunds towards 2.563% and -7.2Pts on our OATs towards 3.050%.
The estimated probability of a rate cut in June, which reached almost 64% a month ago according to the CME Group’s FedWatch tool, has returned to around 12% today.
In view of this barometer, expectations of a rate cut in September have fallen to 44%, almost equal to the scenario of a continuation of the ‘status quo’ (40%).
Pending the publication of the PCE, the yield on 10-year US Treasury bonds eased slightly towards 4.68%, after crossing 4.7% yesterday, the highest since November.
‘A few months ago, long rates had fallen in anticipation of an earlier monetary pivot,’ underlines Oddo BHF.
‘Now that the market is pushing back the pivot, long rates have tightened. The sectors most sensitive to financial conditions risk suffering again’, adds the private bank,
Note that oil has risen significantly in 24 hours (+1.5%) and Brent is trading around $89.5, which may explain the rebound in Total Energie (+2.5%).
In the news of French companies, Saint-Gobain published last night a turnover of 11.4 billion euros for the 1st quarter, down 5.8% on a comparable basis, affected by the decline in new construction in Europe but supported by growth in the Americas and Asia-Pacific. Saint-Gobain assures that it is targeting a double-digit operating margin in 2024, for the fourth consecutive year.
This morning, Safran revealed a turnover of 6.22 billion euros for the first three months of 2024, up 18.1% in raw data and 19.1% organically, with growth double digits in all its activities.
Airbus publishes consolidated adjusted EBIT – a measure of its commercial performance – of 577 million euros for the first three months of the year, compared to 773 million euros a year earlier.
Revenue increased 9% year-on-year to 12.8 billion euros based on 142 commercial aircraft deliveries, compared with 127 in the first quarter of 2023.
TotalEnergies reported on Friday a 22% decline in its adjusted net profit in the first quarter, while citing ‘solid’ performance in line with its objectives for the 2024 financial year. The group generated an adjusted net profit of 5 .1 billion dollars over the first three months of the year, compared to 6.5 billion dollars a year earlier.
Finally, URW publishes a turnover of 942.8 million euros, ai 1st quarter, up 3.7% compared to the previous year. On a like-for-like basis, turnover increased by +10.5%.
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