(News Bulletin 247) – The Parisian index ended Friday’s session with an increase of 1.34%. The Parisian market was driven by the rise in luxury stocks and by an upturn in the morale of American households, which are less pessimistic about inflation.

The Paris Bourse ended the week with a bang. The CAC 40 ended Friday’s session with an increase of 1.34% to 7388.65 points, which brings its overall increase over the week to 2.43%. The index had only one day of decline, therefore temporary, Thursday (-0.5%).

The market welcomed the indicators of the day including the preliminary results of the monthly survey of the University of Michigan for the month of May on the morale of American households. The confidence index rose to 63.9 after 59.2 in April. Household inflation expectations one year ahead have also fallen sharply, to 3.3% against 4.2% previously.

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Significant uncertainties

Enough to support the rebound of the market which has taken the announcements and restrictive speeches of the American Federal Reserve (Fed) and the European Central Bank (ECB) well.

The first marked a pause in its rate hike cycle on Wednesday evening, but its chairman, Jerome Powell, made it clear that further rate hikes were being considered by members of the central bank. For its part, the ECB proceeded as expected by the market to increase its key rates by 25 basis points, or 0.25%.

But here again, the European institution underlined the persistence of inflation and its president, Christine Lagarde, declared that the ECB still had some way to go on this point. The central banker has indicated that its members plan to raise rates further at the next meeting in July.

“Markets are ending the week on a positive note, but uncertainty over inflation and interest rates remains huge and is expected to continue through the summer,” warns Craig Erlam of Oanda.

Luxury shines

In terms of values, luxury carried the CAC 40, with LVMH, Kering and Hermès ending up 3%, 2.2% and 1.8%, respectively. The sector was able to benefit from a technical rebound after its recent stock market soft spot, but also from the interest of investors who are positioning themselves ahead of the earnings season.

Orpea won 6%, taking more than 40% over three sessions. A movement that is difficult to explain but may be due to the positioning of certain private investors playing on an adjustment of the restructuring plan. For its part, LDLC dropped 10.2% after publishing results for its entire 2022-2023 financial year down sharply and below TP ICAP Midcap’s expectations.

On other markets, the euro fell 0.2% against the dollar to 1.0927 dollar. Oil prices are rising slightly. The North Sea Brent contract for August delivery is up 0.5% at $76.05 a barrel while the July contract on New York-listed WTI is down 0.6% at $71.16 a barrel .