(News Bulletin 247) – The Paris Stock Exchange ended this week on a positive note. The CAC 40 rebounded by 1.27% to 7,724.32 points, invigorated by its luxury segment and statistics suggesting a rate cut in the United States.

The Paris Stock Exchange ended the week better than it had started. The CAC 40 rebounded by 1.27% to return to the 7,700 point threshold, at 7,724.32 points this Friday evening.

Markets have regained their appetite for risk after the positive surprise in US consumer prices for June. Inflation slowed to 3.0% over one year in June compared to 3.3% in May.

On the producers’ side, wholesale prices rose against all expectations, by 0.2% in June, and by 2.6% over a year, where the consensus expected an increase of 0.1% over a month, and 2.5% at an annual rate. But the market preferred to put this statistic aside.

Still on the statistical front, the morale of American households deteriorated to 66 points in July, against 68.5 points expected by the consensus and after 68.2 in June, according to preliminary data from the monthly survey of the University of Michigan.

Expectations for one-year inflation are down to 2.9% in July, compared to 3% in June. This tends to support the markets’ current favorite scenario, namely a first rate cut by the US Federal Reserve in September. According to the Fed Watch tool, investors estimate the probability that the Fed will ease its rate policy at the start of the school year at 94%.

“The sequence of the employment and inflation reports from one week to the next is a game changer for markets globally,” notes Florian Ielpo, head of macroeconomic research at Lombard Odier Investment Managers.

“The Fed now appears able to lower its rates twice this year, in September and December. Good news for the markets, as a whole,” the expert continues.

On a weekly basis, the leading Parisian index therefore gained 0.63%, which was far from being a given after a dull start to the week, following the results of the second round of the legislative elections.

A luxury sector in good shape

The rebound of the CAC 40 was also fueled by a rise in the luxury sector. At the top of the Paris index this Friday evening, we find Hermes International 2.5%, Kering (+2.4%) and LVMH (+2.1%), after the results revealed by the Italian Brunello Cucinelli.

Outside the leading index, Kaufman & Broad closed up 3.3%, after announcing half-year results described as “solid” by TP ICAP Midcap.

Ekiniops fell 11.2% after announcing a 19% drop in its turnover for the first half of the year.

Kerlink plunged by 17.4%, the internet of things specialist is no longer able to confirm its objectives revealed last March, citing the wait-and-see attitude of the market and “reduced” visibility on the evolution of its activity.

On the foreign exchange market, the euro rose 0.3% to $1.0903. Oil was sluggish. The September contract for North Sea Brent gained 0.1% to $85.45 a barrel, while the August contract for WTI listed in New York climbed 0.2% to $82.75 a barrel.