The Paris Bourse rebounded on “3 Witches” day, concluding October positively with the CAC40 index up 0.3% to 7,605 points. Despite rising interest rates, European markets showed gains, with Euro-Stoxx50 increasing over 0.6%. Wall Street opened mixed, influenced by housing data, revealing a 0.5% decline in US housing starts. The ECB’s recent rate cuts signal an accommodating monetary stance, while China’s GDP growth slightly slowed to 4.6%. Earnings reports from major companies are expected to drive further market movements.
The Paris stock market swiftly recovered from early losses on this “Triple Witching” Friday, wrapping up a positive October that marks the third consecutive month of gains, amounting to approximately 1.3% to 1.5%. This comes in the face of rising interest rates and an OAT surpassing 2.92%.
The CAC40 index increased by 0.3% to reach 7,605 points after hitting a peak of 7,645. Currently, the benchmark index has achieved a weekly rise of 0.4% and a notable increase of over 6% since its low point on August 5.
The Euro-Stoxx50 also saw gains of more than 0.6%, climbing towards 4,980 points, in alignment with the Dax40, which rose by 0.4% and is nearing its all-time highs at 19,665 points.
As Wall Street resumed trading, the market opened with mixed results. The S&P 500 gained 0.3%, while the Dow Jones, having reached a record high the previous day, experienced a similar decline. The Nasdaq, however, rose by 0.7% to 18,505, buoyed by a 10% surge from Netflix, marking its best levels since mid-October and mid-July. However, these modest gains on this “Triple Witching” day may be precarious. A trader noted that with the presidential election approaching in two weeks, it might be wise for investors to consider taking profits.
‘Given the S&P 500’s year-to-date increase of 22%, it would be imprudent not to,’ he remarked.
Later in the day, the Commerce Department reported a 0.5% decrease in US housing starts for September, totaling 1,354,000 annualized—following a 7.8% increase in August, which had an initial estimate of 9.6%.
Housing permits, an indicator of future housing activity, fell by 2.9% to 1,428,000, while housing completions dropped by 5.7% to 1,680,000, potentially impacted by weather-related construction delays in the southern regions.
It’s important to note that following a rise in long-term rates to 4.40%, mortgage applications in the US have plummeted by 17% since the start of the month, marking the worst performance since April 2020.
Market observers were not taken aback by the European Central Bank’s (ECB) decision to cut rates for the second consecutive time, yet they acknowledged the institution’s more lenient tone, suggesting a possible fourth cut in December.
‘Given the downside risks to both growth and inflation, the ECB’s monetary policy must be adjusted quickly to alleviate its restrictive nature,’ argued Bruno Cavalier, economist at Oddo BHF.
With the ECB meeting concluded, investors are now on the lookout for concrete factors that could guide future market trends.
In China, data released on Friday indicated that the country’s GDP grew by 4.6% year-on-year in the third quarter. Although this performance was slightly above expectations, it marks a deceleration compared to the 4.7% growth seen in the second quarter, according to economists.
Analysts believe that the earnings season may serve as the next driving force for stock market indices. Quarterly results from American Express, Procter & Gamble, and SLB will be closely monitored in this context.
Earlier, Netflix’s strong performance (+10% on Friday) exceeded expectations for the third quarter in both revenue and subscriber growth.
On Thursday evening, Wall Street closed mostly flat, hindered by persistent bond market tensions. US Treasury bonds maturing in 2034 dropped 2 basis points to 4.075%, while 30-year bonds fell 1.7 basis points to 4.377%. In the Eurozone, OAT yields decreased by 2.7 basis points to 2.9030, and Bunds fell by 2.3 basis points to 2.18%.
In the energy market, oil prices continued their upward trend, spurred by Israel’s announcement of the death of Hamas leader Yahya Sinouar. Brent crude increased by 0.4% to $74.75, while US light crude (WTI) gained 0.5%, surpassing $71.