(News Bulletin 247) – The CAC 40 is advancing at mid-session this Friday as investors digest the ECB meeting and look ahead to the Fed meeting next week.

The Paris Stock Exchange is preparing to draw a line under a fairly good week. The CAC 40 rose 0.28% to 7,455.97 points at mid-session this Friday. Over the week as a whole, the index rose 1.37%, for the moment.

Investors are still digesting the content of the European Central Bank’s meeting yesterday. 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.

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Worldline collapses once again

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.

On the value side, Danone lost 1% while Jefferies went from “buy” to “hold” on the file.

Outside the CAC 40, Worldline plunged by 19.3% 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 lost 9.8% after announcing a flash fundraising to finance its clinical trials.

On other markets, the euro is up 0.1% against the dollar, at $1.1089. Oil is gaining ground. The November contract on North Sea Brent is up 1% at $72.67 a barrel while the October contract on WTI listed in New York is up 1.1% at $69.75 a barrel.