CAC40: tests 8000, without support from W-Street, Sté Gale at +13%.

(CercleFinance.com) - The Paris Bourse gained 1.
43% (to 8,001), as the CAC40 regained its closing level of June 7, 2024 (8,001.8pts before plunging to 7,500 in 4 sessions, due to the dissolution effect).

The CAC40 returned to its best levels for 8 months, with the explosive support of Société Générale, which gained over 13.5% after its results, followed by St Gobain (+5.5%, which accelerated spectacularly and pulverized its absolute records at 93.5E) and Pernod Ricard (+3.5%).

The markets are demonstrating a breathtaking ability to digest bad news and stock market "air holes": DeepSeek and Nvidia's plunge, the protectionist measures announced last weekend by US President Donald Trump (fuelling the spectre of a trade war between the US and its main trading partners), the deepening US deficits (twin deficits as we saw on Wednesday with a trade deficit that soared by +24%, to over $920bn over 12 months).
Neither the highest valuations since 2000, nor the weak or obvious signals of a deterioration in employment and consumption, nor Donald Trump's lunar "sorties" on Gaza (which trample on international law and are likely to destabilize the Middle East) are slowing the advance of the European markets.
The Euro-Stoxx50 (1.4%) pulverizes a new all-time record at 5,349 (vs. 5.315 last week), while the DAX40 also set a new record at 21,887 (vs. 21,800 on January 31).

On Wall Street, futures indicated a marginal preopening decline: after a positive opening, the Dow Jones gave up 0.2%, while the Nasdaq and S&P500 (back to within 0.6% of its January 23 record) scratched out a mere 0.1%.

But this was without prejudice to the European markets, which seem to be feeding off Wall Street's hesitations.
Since Tuesday, investors seem a little less worried about international political issues, taking the absence of further bad news as a positive signal, leading them to return to buying stocks in search of potential bargains.

Today, investors are brimming with confidence ahead of Amazon's results, scheduled for this evening, and tomorrow's US employment report (NFP).
Meanwhile, the Labor Department reports that 219,000 new U.S. jobless claims were filed in the week to January 27, up 11,000 on the previous week - when the figure was revised upwards from 207,000 to 208,000.

Tonight, Amazon's accounts will provide interesting indications on the health of the cloud market, a segment strongly linked to the development of AI, following Alphabet's (Google) disappointing performance in this area on Tuesday.
This morning, investors took note of the figures for new orders in volume terms in the German manufacturing industry.

These rebounded by 6.9% in December 2024 compared with the previous month, according to Destatis CVS-CJO data, following a contraction of 5.2% in November (initially revised from -5.4%).

According to Eurostat, the volume of retail sales fell by 0.2% in the eurozone and by 0.3% in the EU, reflecting the gloomy economic climate on the Old Continent.
In November, the volume of retail sales remained unchanged in the eurozone and rose by 0.1% in the EU.
Compared with December 2023, the retail sales index rose by 1.9% in the eurozone and by 2% in the EU. The average annual level of retail trade volume for the year 2024 rose by 1% in the eurozone and 1.3% in the EU... which is equal to or less than the inflation rate, so no 'nominal' growth on the consumption side.

The bond market continues to be torn between fears of a trade war and its inflationary repercussions, which are pushing yields higher, and its status as a safe-haven asset in a nervous market, which is pushing yields lower.

After a worse-than-expected ISM reading for services, arguing for continued monetary easing by the Fed, the yield on 10-year US Treasuries is back at around 4.434% (vs. 4.42% yesterday), while the Bund for the same maturity is at 2.3610% and our OATs at around 3.074% (OAT/Bund spread at +71.3Pts vs. 71.00 the previous day).

Fears of a trade war likely to slow US economic growth are weighing on the dollar, and the euro took advantage of this to close in on the $1.040 mark this morning... but it is now falling back to $1.0365 (-0.4%), remaining under pressure in view of the forthcoming elections in Germany.

On the oil market, the price of 'Brent't slipped a further 0.4% to 74.75 dollars.
Finally, gold is holding firm and preserving its record highs at $2,855.

In French corporate news, Société Générale reports a 2.4-fold increase in net income (group share) for the fourth quarter of 2024 to 1.04 billion euros, representing a return on net tangible assets (ROTE) of 6.6%, and a 57% increase in gross operating income (GOI) to 2.03 billion.

Pernod Ricard reports net income, group share (RNPG) of 1.19 billion euros for the first half of 2024-25, down 24%, and operating profit from ordinary activities (ROC) of 1.98 billion, down 2% organically (-7% as published).

Pernod Ricard now anticipates a 'low single digit' organic decline in sales in 2024-25, while stabilizing its organic operating margin, 'in a difficult macro-economic environment and heightened geopolitical uncertainties'.

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