The control room of Euronext, the company that manages the Paris Stock Exchange (AFP / ERIC PIERMONT)
The Paris Stock Exchange ended up 0.68% on Wednesday, digesting the disappointment of the day before regarding American inflation being higher than expected, and is preparing for a shower of results on Thursday.
The flagship CAC 40 index advanced 52.04 points, to 7,677.35 points. On Tuesday, it lost 0.84% in the wake of the publication of the American CPI inflation index for January.
“We are in a session where the markets are digesting yesterday’s news without panic,” comments Jeanne Asseraf-Bitton, head of research and strategy at BFT IM.
In detail, the publication of the CPI index revealed a slowdown in inflation in January in the United States, to 3.1% over one year compared to 3.4% in December. Analysts, however, hoped to see the index fall to 2.9%, below the symbolic threshold of 3%.
These data should convince the American central bank (Fed) to be patient before beginning its monetary easing after having raised its interest rates to a historic level.
“It is interesting to see expectations of rate cuts” adjusting, notes Jeanne Asseraf-Bitton.
At this stage, “what the market is discounting is a roughly 40% probability that the first rate cut will take place in May and it is certain that at the June meeting, the first rate cut will have taken place place”, explains Jeanne Asseraf-Bitton.
The other element is that “the market is starting to say that the European Central Bank (ECB) could lower its rates before” the Fed, she continues.
However, ECB Vice-President Luis de Guindos again called for caution on Wednesday regarding “risk factors” that could revive inflation and said the ECB should “not rush” to lower rates and will continue to “be guided by the macroeconomic data”.
“For the ECB, it is the absence of data on wages which makes the horizon more uncertain,” explains Jeanne Asseraf-Bitton.
On the agenda for Thursday, market observers will be attentive to the publication of retail sales in the United States for the month of January at 1:30 p.m. GMT (2:30 p.m. in Paris).
In addition, corporate results will continue to drive the Parisian market and are expected to be numerous. Among the companies which will publish their results, there will be Renault, Groupe ADP, Airbus, EssilorLuxottica, Orange, TF1, Legrand, Pernod-Ricard, Safran, and even Schneider Electric.
Flamboyant Capgemini
The French IT giant Capgemini closed up 6.85% to 220.00 euros after publishing a “record” financial year in 2023, including an increase in its net profit of 7%, and showed itself optimistic for 2024 despite an environment that remains “not very buoyant”. Last year, its net profit reached 1.7 billion euros.
Euronext CAC40