Wall Street faces uncertainty with slight declines in US indices, while European markets show more significant drops, particularly in the luxury sector. Inflation in the Eurozone has risen to 2%, complicating potential rate cuts by the European Central Bank amid political unrest. Bond yields have shifted, and the dollar strengthens against the euro, affecting gold prices. In corporate news, Thales Alenia Space successfully launched a satellite, while Getlink reported a 12% drop in passenger vehicle transport.
Wall Street’s Mixed Performance
Wall Street is experiencing a moment of uncertainty after achieving its fifth consecutive positive opening. US indices are slightly down, with the S&P and Nasdaq dipping by 0.1% to 0.2%. These declines are minor compared to the more significant 2.4% drop seen in the Paris Stock Exchange. The CAC40 has fallen below the crucial 7,350 mark—a notable support level identified on September 6 and October 31—plummeting an additional 100 points to 7,245. This decline is largely attributed to the luxury sector, with Kering, LVMH, and Hermès experiencing losses of 6.5%, 4.8%, and 3.5%, respectively. Other notable declines include Schneider and Legrand, both down by 3%.
European Market Trends and Economic Indicators
In Europe, the DAX40 in Germany has fared slightly better, down by 1.9%, while the E-Stoxx50 has decreased by 1.6%. Despite this, the S&P remains near 6,000, and the Dow Jones has seen a minor drop of 0.3%, maintaining levels above 44,200. The ‘VIX’ index remains stable at 14.85, with a negligible increase of 0.4%, indicating that investors retain confidence in US stocks while distancing themselves from Euro-denominated assets over the past week.
The stagnation of indices across the Old Continent is not unexpected, given the recent political uncertainties, sluggish growth, and disappointing corporate earnings. As we look ahead, investors are advised to closely monitor upcoming economic indicators. The situation appears grim as inflation in the Eurozone has risen to 2% year-on-year for October, up from 1.7% in September, diminishing the prospects for a significant rate cut in December.
Furthermore, the European Central Bank (ECB) is unlikely to expedite rate cuts, as internal disagreements within the institution have surfaced. In Germany, the ZEW index of investor sentiment has declined, reflecting the ongoing political turmoil following the collapse of the tripartite coalition last week. In a related note, Germany’s inflation rate, measured by the consumer price index (CPI), has been confirmed at 2% for October 2024, compared to 1.6% in the previous month.
On the bond market, US 10-year Treasury Bonds are yielding 4.2 points around 4.392%, while the German Bund of the same maturity is at 2.35%, marking a yield increase of 1.5 points. Meanwhile, French OATs have deteriorated by 3.5 points to 3.1140%. The dollar continues to strengthen against the euro, down by 0.5% and approaching the 1.0600 mark (currently at 1.0602), which is also contributing to a decline in gold prices, now hovering around $2,600 per ounce.
In corporate news from France, Thales Alenia Space—a joint venture between Thales (67%) and Leonardo (33%)—has successfully launched the Koreasat 6A telecommunications satellite aboard a SpaceX Falcon 9 rocket from Cape Canaveral, Florida. Additionally, Getlink has reported that LeShuttle transported 147,919 passenger vehicles in October 2024, a decrease of 12% compared to the same month last year, which had benefited from the Rugby World Cup.