(News Bulletin 247) – The Paris Stock Exchange is gaining ground again, driven by the accommodating statements of a Fed governor and by the slowdown in inflation in Europe. The CAC 40 therefore increased by 0.24% at the close this Wednesday evening despite the drop in TotalEnergies.

After two sessions of pause, the Paris Stock Exchange resumes its rise, using the declarations of a member of the American Federal Reserve (Fed) and reassuring economic indicators to revive itself.

The CAC 40 gained 0.24% to 7,267.64 points this Wednesday, the day after a session in the red. The flagship Parisian index is regaining some good humor, helped by a slowdown in inflation in several euro zone countries.

In Germany, price increases continued to decline in November, to 3.2% year-on-year, the lowest since June 2021, and in Spain it also decelerated slightly to 3.2% year-on-year. These figures bode well before the publication on Thursday of those for the entire euro zone.

In the United States, third-quarter growth was revised upwards to 5.2% annualized, according to a second estimate from the Commerce Department.

The market will also wait for the publication of the PCE index on Thursday, the preferred gauge of the American Federal Reserve (Fed) to measure the rise in prices in the United States. These figures will feed into the thoughts of the Fed which will hold its last monetary policy meeting of the year on December 12 and 13. Its president, Jerome Powell, will speak this Friday.

In the meantime, one of the governors of the Fed, Christopher Waller, expressed his confidence in the current level of key rates, judging that they should allow the American economy to slow down sufficiently for inflation to return to around 2%.

These comments did not leave investors indifferent and contributed to the relaxation on the bond market, the rate of the 10-year American debt is moving to its lowest in four months, around 4.30%, just like the yield of the same maturity in France, which trades below 3%.

“But, for once, the markets showed selectivity on Christopher Waller’s comments. The latter indeed added that the slowdown in the economy (induced by restrictive monetary policy) would have an impact on credit delinquencies and corporate results. Also indicating that these are signs of moderation in demand expected by the Fed,” points out Alexandre Baradez, head of market analysis at IG France.

“The markets could therefore be torn in the coming weeks by two opposing forces: on the one hand the easing of bond rates which is currently supporting the rebound in equities, but on the other hand pressures which should “increase on the macroeconomy”, continues Alexandre Baradez.

TotalEnergies declines

On the value side, cyclical stocks are doing well, like the automotive sector such as Stellantis (+5.2%), Forvia (+4%), Michelin (+2.4%). and Renault (+2.3%).

Conversely, TotalEnergies fell by 2.4%, penalized by a rating from Jefferies which went from “buy” to “hold” on the stock. The financial intermediary displays its caution on gas prices in Europe as well as on the company’s cash generation.

Trigano only gained 0.2% after publishing good results for its 2022-2023 financial year ended last August.

On other markets, the euro lost 0.4% against the dollar to 1.0963 dollars. Oil continues to rise pending Thursday’s OPEC+ meeting. The January contract on North Sea Brent rose 0.7% to 82.04 dollars per barrel while that of the same maturity on WTI listed in New York rose 0.9% to 77.13 dollars per barrel. .