(News Bulletin 247) – The Parisian index rebounded strongly on Tuesday evening, while the market does not rule out rate cuts from the American Federal Reserve this year. The CAC 40 is now approaching 8,100 points.

The Paris Stock Exchange completes the three-way mark and handily secures the 8,000 points level this Tuesday evening. The CAC 40 in fact jumped 0.99% to 8,075.68 points, now with 8,100 points in its sights.

Optimism is gaining ground in Paris after new figures showing an improvement in economic activity in the euro zone. Against all expectations, retail sales grew by 0.7% on an annual basis in March, where the consensus expected a contraction of 0.2%.

The day’s progress is also fueled by investors’ hopes for rate cuts from the American Federal Reserve (Fed). According to the CME Group’s FedWatch tool, they expect more than 60% of two key rate reductions by the end of December from the American central bank.

Bond market easing

“The market is taking a positive stance on the U.S. jobs data and expects the Fed to be able to cut rates,” Arnaud Girod, head of the Fed, told Bloomberg. economics and multi-asset strategy at Kepler Cheuvreux in Paris.

“New York Fed President John Williams said there are signs that households are more cautious in their spending, and he expects rate cuts eventually, although the decision to lower them will depend on all the available data,” report analysts from Natixis CIB Research, cited by Agence France Presse. “Thus, the Fed could start lowering rates as soon as the summer break ends,” they add.

On the bond market, this perspective leads to a continued easing of rates. The yield on American debt returned to one-month lows, at 4.44%, while the French 10-year bond eased to 2.916% from 2.981%.

On Wall Street, the trend is a little softer. The Dow Jones gained only 0.2% at the close of European markets, undermined by Disney which is currently experiencing its worst session since 2022, due to disappointing figures for its streaming service.

Alcoholiers toast Emmanuel Macron’s health

The market is also preparing for a series of public holidays in Europe which are likely to weigh heavily on volumes, particularly Wednesday and Thursday in Paris.

Investors also continue to dissect the results of companies, notably those of Bouygues (-1.6%), which turned out to be lower than consensus, in the first quarter.

Outside of the results, Remy Cointreau gained 6% and Pernod Ricard 3.1%, with both spirits groups supported by Emmanuel Macron’s statements. The President of the Republic thanked his Chinese counterpart, Xi Jinping, on Monday evening, affirming that the latter would not apply sanctions on French cognac.

Ubisoft gains 3.7% driven by Stifel which raised its purchase recommendation on the video game publisher, citing both the catalog of releases for the next fiscal year and the attractive valuation of the group.

As for other markets, the euro is stable against the dollar at 1.0744 dollars. Oil remains on a downward trend. The July contract on North Sea Brent lost 0.3% to $83.06 per barrel, while that on WTI listed in New York lost 0.3% to $78.27 per barrel.