(News Bulletin 247) – The Paris Stock Exchange continues its decline this Wednesday at mid-session, while awaiting the report of the last monetary policy meeting of the American Federal Reserve. The poor shape of the luxury sector is also weighing on the trend in Paris.

The Paris Stock Exchange continued its decline this Wednesday at mid-session, with a drop of 1.4% to 7,427.40 points for the CAC 40. The Parisian index had already lost 0.16% on Tuesday, for the first session of the year 2024.

Markets are giving in to the call for profit-taking after an end-of-year 2023 rally fueled by expectations of significant key rate cuts in 2024 from the European Central Bank (ECB) and the American Federal Reserve (Fed).

Also the latest statistics published in Europe call for caution, particularly on the health of the job market across the Rhine. The unemployment rate in Germany increased by 0.1 point over one month to approach 6% to 5.9%.

On the other side of the Atlantic, investors will take note of the ISM manufacturing index for the month of December and the report on job openings in the United States (Jolts) for the month of November, before the account report from the last meeting of the American Federal Reserve.

Break on oil

Geopolitical tensions are darkening the picture for the start of 2024 on the markets. “In the Middle East first of all, where we thought the conflict was quite limited but which could ultimately have more repercussions on the economy than initially anticipated: tensions in the Red Sea have in fact increased a notch in the in recent days with the entry of an Iranian warship into the area, reviving fears of an extension of the conflict, the day after American strikes on three Houthi ships, in response to attacks on the carrier Maersk, in part of the multinational naval force responsible for protecting ships in the area”, indicated Thomas Giudici, head of bond management at Auris Gestion.

However, oil is taking a break this Wednesday, due to an increase in exports of Russian crude, which strengthens the supply of black gold. Quoted by AFP, DNB analysts indicate that “Russian maritime oil exports increased (…) to reach 3.78 million barrels per day last week, ending the year on a high”.

A barrel of Brent from the North Sea, for delivery in March, lost ground at $75.85. A barrel of West Texas Intermediate (WTI), for delivery in February, fell by 0.47%, to $70.06, shortly after slipping below the $70 mark. The day before, these two major world oil benchmarks had gained more than 2% supported by fears over a supply of black gold after the latest attacks in the Red Sea.

Sanofi in good shape

Sanofi stands out and progresses by 0.9%, supported by an increase in recommendation from Wolfe Research which moves to outperform with a price target of 105 euros.

On the other hand, Alstom plunges by 7.5%, penalized by Barclays which remains underweight with a price target lowered from 8.5 to 8 euros.

Up sharply in early trading, Atos is now down 6.2% after announcing this Wednesday morning to discuss a takeover by Airbus (-2.1%) of its BDS (big data and cybersecurity) activity.

The luxury sector is not in great shape either, with Kering losing 2.7% while Stifel, which is to be kept on file, reduced its target price from 430 to 420 euros. LVMH is not immune to the decline (-2.9%), just like Hermes (-1.8%).

On the foreign exchange market, the euro lost 0.2% to 1.092 dollars.