The Paris Stock Exchange ended up 0.91% on Friday, reflecting its week marked by a clear progression, investors letting themselves be carried away by the pleasant surprise of American inflation which is slowing.
The flagship CAC 40 index gained 65.51 points, 7,233.91 points. Over the week, it gained 2.68%.
The starting point for this progression is the consumer price index in the United States, which came out sharply lower on Tuesday compared to September, and a little lower than expected by economists, recalled Nathalie Benatia, macroeconomist at BNP Paribas AM. .
This trend allows investors to imagine that the American central bank (Fed) as well as other Western central banks could lower their key interest rate, the main tool to fight inflation.
The deterioration of economic indicators confirms their idea that central bankers will no longer be able to ignore the impact of high rates on activity, which explains why this news is for the moment also well received by the markets, explains the economist.
However, we must be careful if we start with something more worrying, if the soft landing of the economy, dreamed of by the markets, turns into a deeper crisis, warns Ms. Benatia.
Published on Friday, retail sales in the United Kingdom fell to their lowest level in volume since the 2021 confinements, and the second estimate of inflation in the euro zone was 2.9% year-on-year in October, down sharply from September report, consistent with the initial estimate, reinforced this feeling.
However, Ms. Benatia also emphasizes that the rise in the markets is based on the idea that the key rate cuts will take place in the first months of 2024, a timetable that she finds, like other analysts, too anticipated.
On the bond market, the interest rate on the 10-year French government bond increased slightly to 3.16%. It was 3.30% on Friday November 10, after having come close to 3.60% during the month of October.
The drop in rates makes people happy
The companies that made the most progress over the week on the CAC 40 are among those that benefit the most from low interest rates. The Unibail-Rodmanco Westfield property gained 8.27% over the week, 54.72 euros.
The technology sector also benefited, with STMicroelectronics which increased by 8.57% over the week, 41.93 euros, Teleperformance which rose by 7.69% to 135.10 euros and Worldline by 7.76% to 13.75 euros.
Eiffage, a 4 billion euro contract
The construction giant will carry out the civil engineering work for the EPR2 nuclear reactors planned for Penly (Seine-Maritime) for an amount exceeding 4 billion euros. Its stock gained 3.92% to 90.74 euros.