CAC40: limited erosion, despite the beginnings of a rate cut

(CercleFinance.com) - The Paris Bourse has tipped into negative territory since the opening of Wall Street: the gap remains modest (-0.
1% to -0.2%) and the impression left by this session is that the CAC40 has been trapped in an algorithmic straitjacket since 11:30 this morning....against a backdrop of crushing volumes (only 1.2 billion euros traded in 8 hours of trading).

Our OATs are easing a little more sharply, by -7pts to 3.02%, Bunds by -5.5pts to 2.5200%, Italian BTPs by -8pts to 3.81%.
Moody's and Fitch's maintenance of our debt rating is hardly a hat-trick.

The index slips towards 8,075 points and seems headed for a close at the day's high.

Same scenario for the Euro-Stoxx50, which loses between -0.4 and -0.5%: the pan-European index falls back below 5,000Pts, moving against the trend.000Pts, bucking the trend of the US indices whose gains ranged between +0.2% for the Dow, +0.3% for the S&P500 and +0.4% for the Nasdaq (boosted by Tesla's +12%, which will finally be able to experiment with automatic driving in China).

Closely watched after Moody's and Fitch's decision, the Euro rallied +0.2% against the Dollar to 1.0715. It was a day without much volatility, except for the $/Yen pair, where the Japanese currency rebounded +1.2%, from 158.3 on Friday to 156.7 (BOJ intervention).

Although most European markets will be closed on Wednesday for the May 1st holiday, the week's economic agenda promises to be a busy one, culminating in the Fed's monetary policy meeting on Wednesday evening.

No rate changes are expected at this meeting, but investors will once again be looking to Fed Chairman Jerome Powell to clear up the fog they've been in for the past few weeks.

This comes at a time when the latest US inflation figures have rekindled fears that monetary easing by the Federal Reserve may take longer than expected, and may not materialize until November.

Employment figures, due out on Friday, should testify to the strength of the US economy, with 250,000 new jobs expected in April, compared with 303,000 in March.
In the US, T-Bonds start the week on a positive note with -5pts towards 4.6200%... the '2-yr' eases by 5% to 4.975%: nothing spectacular either.

If rates continue to ease, the week ahead could see the technology-weighted index return to its all-time highs, boosted by the results of the sector's mega-cap companies.

Amazon's quarterly results on Tuesday evening, followed by Apple's on Thursday, will shed light on the current form of the tech giants and their ability to continue to drive equity markets higher.

Among the avalanche of results expected across the Atlantic later this week are those of AMD, 3M, Coca-Cola, Eli Lilly, Pfizer, McDonald's and Qualcomm.

In Europe, the accounts of adidas, ArcelorMittal, Crédit Agricole, Legrand, Mercedez-Benz, Société Générale and Volkswagen will also be closely watched.

In the news from French companies, Vivendi reports sales of over 4.27 billion euros for the first three months of 2024, up 86.6%, mainly generated by the consolidation of Lagardère as well as higher sales at Groupe Canal+ and Havas.

Bolloré reports sales of 5.02 billion euros for the first quarter of 2024, up 63% on a reported basis, mainly due to the full consolidation of Lagardère at Vivendi.

Atos announced on Monday that it had received a non-binding letter of intent from the French government to acquire 100% of its supercomputing, mission-critical systems and cybersecurity businesses.

Société Générale Group announces the signature of a 20-year Power Purchase Agreement (PPA) with French producer JP Energie Environnement (Jpee).

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