(News Bulletin 247) – The Paris Stock Exchange returned to an upward trend the day after a particularly volatile session. The CAC 40 is making its return above 7,400 points, while awaiting the verdict from the Fed, which should announce a rate cut this Thursday evening.

The Paris Stock Exchange is getting back into working order the day after a volatile session linked to the market reaction to Donald Trump’s victory in the American presidential election.

The CAC 40 closed up 0.76% to 7,425.60 points, an increase which allowed it to erase the delay conceded on Wednesday. Note that in Frankfurt, the DAX 40 rebounded by 1.7% at the close, ignoring political uncertainty in Germany.

The market continues to assess the repercussions of Donald Trump’s return to the White House next January.

“Trump remains unpredictable. It is therefore very difficult to predict which of his almost innumerable and not always coherent electoral promises will actually be implemented. But unlike 2016, the electoral success of Trump and his team is not a surprise. His advisors are prepared,” Berenberg explains.

“For Europe, the return of Donald Trump to the White House represents considerable commercial and geopolitical uncertainty, which will have a negative impact on growth in Europe,” adds the German bank.

Investors are especially awaiting, this Thursday evening, the outcome of the meeting of the American Federal Reserve (Fed). A rate cut of 25 basis points (0.25 percentage points) is widely expected by investors.

But the market will try to watch for the slightest comment from its president, Jerome Powell, which would make it possible to detect clues for the future. Investors particularly fear that the expansionary and inflationary policy desired by Donald Trump will give the Fed less room to maneuver to lower its rates.

Arcelormittal and luxury at the party

In terms of values, Arcelormittal finished at the top of the CAC 40 (+6.7%). The steelmaker delivered free cash flow and gross operating profit significantly above expectations in the third quarter

Luxury was also well oriented, benefiting from a favorable cross-reading of better than expected results from Tapestry (+4.4% on Wall Street), the parent company of Coach but also from Ralph Lauren (+5.4 % also on Wall Street). Kering gained 4.2%, Hermès gained 3.1% and LVMH rose 2.6%.

Conversely, Legrand finished bottom of the CAC 40 with a decline of 7.3%. The industrial group was sanctioned after delivering results significantly below expectations for the first nine months of its 2024 financial year.

Excluding the CAC 40, Air France-KLM plunged 10.5% after publishing third-quarter accounts that were degraded and lower than expected, due to higher than expected costs, particularly at KLM.

Trading in Exail Technologies resumed this Thursday with the stock gaining 9%. The Directorate General of Armaments has selected Exail and Thales to supply sixteen underwater drones to the French Navy.

On other markets, the euro rose slightly against the dollar, gaining 0.6% to 1.0791 dollars, after being battered by the American currency on Thursday (-1.85%). The election of Donald Trump pushed up US bond yields, which had the effect of propelling the dollar. This is because his policy risks resulting in more inflation and deficit in the United States.

The oil regains some color. The January contract on North Sea Brent gained 0.5% to $73.30 per barrel while that of December on WTI listed in New York also climbed 0.50% to $72.02 per barrel.