(News Bulletin 247) – The Paris Stock Exchange ends the week on reserve, before entering a new week marked by the Fed meeting. Investors also take note of the appointment of François Bayrou to Matignon.

The Paris Stock Exchange finally ended the week in decline. After having evolved for a good part of the session in positive territory, the CAC 40 closed down 0.15% at 7,409.57 points this Friday. On a weekly basis, the Parisian index lost 0.23%.

Investors remained cautious ahead of the US Federal Reserve’s policy meeting next week.

“We expect the FOMC to cut rates by 25 basis points next week, but will indicate a more gradual rate path subsequently”, argue the economists at Barclays.

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Towards limited rate cuts in 2025?

“We believe the Economic Outlook report will show upward revisions to growth and inflation, lower unemployment, and three cuts next year. We maintain our baseline assumption that the FOMC will not cut its rates more than twice in 2025,” they add.

Operators also dissected, this Friday, the announcements of the major central banks from the day before. The European Central Bank (ECB) reduced its key rates by a quarter of a point and lowered its growth and inflation forecasts for the years 2024 to 2026.

“More importantly, in our view, the statement and press conference made it very clear that the monetary stance was still restrictive, with Christine Lagarde (the president of the ECB, editor’s note) stating that there was ‘no question on this subject'”, underlines Frederik Ducrozet director of Macroeconomic Research at Pictet Wealth Management.

“In addition, the wording on inflation and wages was also dovish. High domestic inflation remains a concern, but it was described as the adjustment of ‘certain sectors’ to the inflationary surge passed ‘with substantial delay'”, he continues. The Swiss National Bank has reduced its rates by half a percentage point.

Investors are also keeping an eye on politics in France where François Bayrou has just been appointed Prime Minister by the President of the Republic, Emmanuel Macron.

Promising beginnings for Odyssée Technologies

On the value side, automobiles had a good session, Renault gained 1.50% and Stellantis 1.1%.

Note that the precision mechanics specialist Odyssées Technologies made a promising debut on the Paris Stock Exchange, ending up 19.6% for its first day of trading.

On other markets, the euro gained 0.28% against the dollar to 1.0502 dollars. Oil is rising a little. The February contract on North Sea Brent gained 1.3% to $74.37 per barrel while the January contract on WTI listed in New York gained 1.6% to $71.11 per barrel.