The Paris Stock Exchange is up slightly in the wake of strong growth on Wall Street, which benefited on Friday from hopes of a slowdown in the pace of Fed rate hikes. But the market pared its gains in reaction to the further deterioration in manufacturing activity in the Eurozone in October. The PMI index calculated by S&P Global fell 1.8 points to 48.6 in flash data, a 29-month low as inflationary pressures remain high amid pressures on energy prices and claims on wages.
The week also promises to be busy in terms of corporate publications and macroeconomic indicators, with the highlight being the monetary decision of the ECB and third quarter GDP in France, Germany and the United States. .
Shortly after 10 a.m., the Bedroom 40 takes 0.47% to 6,063.70 points after a peak at 6,116.20 (+ 1.33%), in a volume of 450 million euros.
In China, growth reached 3.9% in the third quarter, exceeding analysts’ expectations, which had forecast an increase of 3.3%. But the zero Covid policy, the collapse of the real estate market and the risks of a global recession are undermining Beijing’s initiatives intended to promote “common prosperity” in 2023. The publication of the GDP had been postponed due to the XXth Congress of the Communist Party. Unsurprisingly, Xi Jinping was reappointed for a third term and tightened his grip on the party’s governing body.
Erratic movements on the pound sterling
The pound has seen major swings following Boris Johnson’s withdrawal from the Conservative Party leadership race to succeed Liss Truss as Prime Minister. The British currency rose to 1.1409 dollars before falling back around 1.1356 (-0.2%). So far only Rishi Sunak and Parliamentary Relations Minister Penny Mordaunt have applied. The former finance minister is a favourite. Candidates have until 2pm (London time) to secure the sponsorship of 100 MPs. If a single suitor obtains these 100 supports, he will automatically be appointed Prime Minister. Otherwise, a first ballot to decide between the two, or three candidates at most, is scheduled for 6 p.m. (7 p.m. in Paris).
Towards a debate within the Fed
Wall Street wrapped up its best week since June on Friday, buoyed by expectations of a slower pace of Fed rate hikes following news from the wall street journal that the Federal Reserve could be debating reducing the size of the rise in the cost of money in December.
Beyond the ECB’s monetary decision on Thursday, which should result in a 75 basis point tightening of the refi rate, the week will be animated by the publication of the third quarter results of Gafam (Alphabet, Apple, Amazon, Meta and Microsoft), as well as by the turnover of 18 components of the Cac 40.
Imerys will exploit a lithium deposit in France
Biggest rise in SRD, Imerys increased by 3.9%. The specialist in minerals for industry has announced the commissioning by 2027 of a lithium deposit in France in the Allier department.
Solvay appreciated by 1.3%. The specialty chemicals group raised its full-year guidance, citing higher-than-expected third-quarter profit.
Within the CAC 40, Airbus gains 0.6%. Saudi Arabia is in advanced negotiations with the aircraft manufacturer for an order for nearly 40 A350s, according to industry sources quoted by Reuters. The kingdom would seek to create a new airline in order to compete with the major carriers of the Gulf countries.
Renault on the contrary, loses 3.3%. The discussions between the French manufacturer and Nissan on the investment of the Japanese group in the electric entity of its French partner stumble on the sharing of technologies, reports Reuters, citing sources familiar with the matter.