(News Bulletin 247) – The Paris Stock Exchange ended the week on the rise, reassured by a marked improvement in American consumer morale and while investors are thinking about the extent of the Fed’s rate cuts expected next week. The CAC 40 gained 0.4%, and 1.5% over the week.

The Paris Stock Exchange ended the week with a rise. The CAC 40 rose by 0.41% to 7,465.25 points on Friday evening, after reaching a high of 7,490.84 points early in the afternoon. Over the week as a whole, it rose by 1.54%, making up for some of the losses incurred last week (-3.65%).

The Parisian star index appreciated the American statistic of the day. The morale of American consumers improved more than expected in September. According to the monthly survey of the University of Michigan, the index came out at 69 points, against 68.5 points expected and after 67.9 points in August.

After the ECB, it’s time for the Fed

Enough to put a smile on the faces of the markets, which were still digesting the content of the European Central Bank meeting the day before. The central bank, as expected, lowered its main interest rate, the deposit rate, by a quarter of a percentage point. But its president, Christine Lagarde, avoided giving too many indications for what comes next, going so far as to say (in Spanish) “Que sera sera” (“what will happen will happen”).

“While the market has revised its expectations of rate cuts (by the ECB, Editor’s note) slightly downwards after yesterday’s meeting, it still anticipates rate cuts twice as fast by mid-2025, with cuts of 25 basis points (0.25 basis points) at each meeting of the European Central Bank (ECB) until the key rate falls below 2%. This is not an impossible scenario but it would require the absence of a recovery in the eurozone or a rapid slowdown in tensions on the price of services, which is not our scenario as it stands,” explains Xavier Chapard, strategist at LBPAM.

Investors are now looking ahead to next week’s US Federal Reserve (Fed) meeting. The market is currently pricing in two main options: a rate cut of 25 basis points (0.25 percentage points) or 50 basis points (0.50 percentage points).

“A few articles appeared in the Wall Street Journal and the Financial Times suggesting that a 50 basis point move was still in play, leading markets to reassess their expectations once again, and futures are now pricing in a 47.5% chance of a 50 basis point move this morning,” Deutsche Bank noted.

Worldline collapses once again

In terms of values, Groupe Bolloré rose by 4.8%, with investors welcoming the planned simplification in the galaxy of companies that make up the Breton businessman’s conglomerate.

Worldline plunged 14.4% after issuing a new profit warning, one too many for its CEO, Gilles Grapinet, who will leave the company at the end of the month.

Valneva fell 10.45% after announcing a flash fundraising to finance its clinical trials.

Another struggling stock is Miliboo, which fell 11.3% after reporting a decline in turnover over the first three months of its staggered 2024-2025 financial year, due to sluggish household consumption.

On other markets, the euro is up 0.1% against the dollar, at $1.1086. Oil is gaining ground. The November contract on North Sea Brent is up 0.65% at $72.44 a barrel, while the October contract on WTI listed in New York is up 0.7% at $66.44 a barrel.