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The CAC 40 index confirmed on Thursday its break of 4,500 points, suffered the day before on gap, considerably degrading the short-term technical configuration. Over one month, the performance of the flagship Parisian index is strongly negative (-3.74%), which this year reinforces the high-risk reputation of the month of October on the stock market.
In terms of statistics, no surprises regarding PCE prices (personal consumption expenditures), up 0.3% monthly excluding food and energy. Note that weekly registrations for unemployment benefits are still close to the 200,000 threshold, illustrating chronic tensions on the employment front, tensions which will be confirmed or refuted today with the NFP (Non Farm Payrolls). Target exceeded for household spending (+0.4% monthly), statistics which echo the publication at the start of the week of the consumer confidence index (Conference Board), and which contribute to the warm-up of the 10 American years, now close to 4.3%.
Concerning the NFP, the major statistical meeting of the day, the consensus is at 106,000 job creations in the private sector (excluding agriculture). As a reminder, in September, the American economy had created 254,000 jobs.
In terms of values, the news was still very rich with a slew of quarterly copies.
On the CAC 40, on the disappointment side, BNP Paribas (4.2%) delivered quarterly accounts only in line with expectations, while Totalenergies (-2.9%) disappointed with results penalized by the drop in oil and refining margins. For its part, STMicroelectronics (-2.9%) did not reserve any unpleasant surprises in the third quarter, but its outlook for the fourth came out below expectations, points out Morgan Stanley. On the positive side, Société Générale (finally) published solid results in the third quarter, particularly in retail banking in France. The stock closed at the top of the CAC 40 with an increase of 11.3%. Stellantis gained 3% after reporting revenues in line with (low) consensus expectations.
Excluding CAC 40, Pluxee soared more than 21% after raising its outlook for fiscal years 2025 and 2026 on Thursday, citing “solid” financial performance in 2024 and expressing confidence in the structural growth trends of the market. Conversely, Spie returned 4.7% due to less robust quarterly activity than expected by the market when Rubis fell by 10.3% after lowering its gross operating profit target for 2024.
On the political level, the “Money Time” of the race for the White House is launched while the bird words fly between the candidates, through meetings.
“As in the last elections, this could be decided by a few votes and the results could not be known the same day, each state having, moreover, its own electoral rules (and contesting the results)”, comments Thomas Giudici , head of bond management at Auris Gestion, who has the humility not to play the oracles: “It is therefore quite complicated to position the portfolios in one direction or the other as the result of the election is more of the casino than of political or financial analysis”.
If it is indeed impossible to predict the final result, which will probably not be known immediately on November 5, the two scenarios have different implications:
“If Vice President Harris wins, her expansionary tax agenda, while unlikely to be fully realized due to likely Republican control of the Senate, could nonetheless result in targeted tax measures such as an expansion of the child tax credit and an extension of some of Trump’s 2017 tax cuts”; says Michael De Palma, co-head of the global bond market at MacKay Shields LLC, in charge of Nordea AM’s US Investment Grade strategies.
In contrast, “if former President Trump wins the election, Republicans would likely control both houses of Congress, opening the door to a full extension of the expiring provisions of the 2017 tax cuts, and possibly to new tax breaks for corporations and small businesses Trump also discussed additional support for households, such as an expanded tax credit for families with children and a number of additional tax deductions for households.
On the other side of the Atlantic, the main equity indices finished in the red, even bright red for the heavily technology-weighted indices. If the Dow Jones lost 0.90% to 41,763 points, the Nasdaq Composite fell sharply by 2.76% to 18,095 points, with disappointments caused by the quarterly copies of Meta (-4.09%) and Microsoft (-6.05%).
An update on other risky asset classes: around 8:00 a.m. this morning on the foreign exchange market, the single currency was trading at a level close to $1.0870. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $70.30.
On the macroeconomic agenda this Friday, to follow in priority the Non Farm Payrolls report on the health of private employment in the United States at 1:30 p.m., as well as the ISM manufacturing PMI at 3:00 p.m.
Note that the East Coast of the United States has not in turn switched to winter time, the opening of Wall will take place, in the meantime, at 2:30 p.m.
This Friday, November 1, a public holiday, the Paris Stock Exchange will remain open, under usual opening and trading conditions.
KEY GRAPHIC ELEMENTS
The 7,465/7500 points gave way on Wednesday 30/10, on gap, in thick volumes, and in conditions of notable volatility. The short-term bearish message is thus mechanically validated. The next identifiable level is 7,340 points. The weekly closing level will be interesting. A close at the low points of the week would mechanically degrade the technical message sent.
FORECAST
Considering the key graphical factors that we have mentioned, our opinion is negative on the CAC 40 index in the short term.
This bearish scenario is valid as long as the CAC 40 index is below resistance at 7690.00 points.
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