CAC40 Leads European Markets with a 0.7% Rise

Paris Stock Exchange has surged by approximately 0.7%, reaching 7,890 points, marking its eighth consecutive gain and closing in on the 8,000-point milestone. Meanwhile, Wall Street shows mixed results, with the S&P500 hitting a record 6,101 points. Optimism in the market is driven by a significant AI investment announcement and strong earnings from Netflix. In corporate news, Groupe Seb has acquired La Brigade de Buyer, and Technip Energies has secured an engineering contract with Uniper.

Paris Stock Exchange Surges to New Heights

The Paris Stock Exchange continues to soar, boasting a gain of approximately +0.7% and reaching 7,890 points, even as Wall Street remains relatively stagnant this Thursday. The CAC40 has now achieved its eighth consecutive session of gains and is inching closer to the 8,000-point mark, currently sitting less than 1.5% away. This year alone, the index has recorded an impressive annual increase of +6.7%. Since hitting a low on November 27, the CAC has bounced back by 11%. The notable resistance level at 7,800 points, which was previously a peak on September 27, 2024, has been surpassed with ease, and the narrowing of the ‘OAT/Bund spread’ to 77.5 points is also seen as a positive indicator.

Wall Street and Global Market Trends

The Euro-Stoxx50 is lagging behind the CAC40, struggling to escape negative territory at 5,205 points. However, there is a potential for new records before the weekend if it can surpass the 5,229-point threshold. Wall Street is experiencing a bit of hesitation after reaching record levels, with the S&P500 recently hitting a new peak of 6,101 points, maintaining stability this Thursday. The Dow Jones has climbed +0.2% to 44,250, while the Nasdaq has dipped by 0.3% but remains just 1% shy of its 6,200-point high.

This week’s optimism has been fueled by the White House’s announcement of a substantial AI investment plan, named ‘stargate’, which has significantly bolstered market confidence. Last night, all US indices, except for the Russell-2000, experienced gains, with the S&P 500 setting a new all-time record above 6,100 points during the session.

Positive earnings from Netflix, which saw a +10% increase yesterday followed by a +2.5% rise today, have also contributed to the supportive atmosphere in the market, providing a favorable outlook ahead of the upcoming earnings reports from major tech companies next week. Nvidia has solidified its position as the largest company by market capitalization, valued at nearly $3.56 trillion, though it has recently declined by 1.3%. Meanwhile, Apple, facing challenges from Samsung and losing traction in China, risks dropping from its position as the top market cap to third place within just a week.

In light of the ongoing enthusiasm, analysts from Danske Bank remind investors not to overly reduce their risk exposure during times when macroeconomic, microeconomic, and monetary factors are favorable, despite political headlines dominating media coverage. However, some investors may still consider adopting a more defensive approach while they await the release of PMI activity indices in Europe tomorrow.

In terms of employment figures, the ‘figure of the day’ reports that the US Department of Labor has recorded 223,000 new unemployment claims for the week ending January 13, reflecting an increase of 6,000 from the previous week. Meanwhile, the four-week moving average, which provides a clearer view of the underlying trend, is at 213,500, showing a slight increase of 750 claims from last week.

On the foreign exchange front, trading has been notably calm, with the euro stabilizing at 1.041 against the US dollar following a recent recovery. The Yen has seen a modest gain of 0.1% against the dollar. With a resurgence in risk appetite driving stock markets over the past ten days, bonds have become less appealing, leading to a consolidation phase in this sector. In the US, the yield on ten-year Treasuries has dropped by +5.5 points to 4.655%, while the 30-year yield has risen by +5.4 points to 4.8700%. The German ten-year Bund yield has increased by +2.2 points to 2.5200%, while the OAT of the same maturity has decreased by +3.7 points to 3.300%, resulting in a France/Germany spread of 78 points.

Finally, in the commodities market, Brent crude oil has gained nearly 0.5% in London, while WTI has risen +0.6% to around $75.85 on the NYMEX.

In corporate news from France, Groupe Seb has announced its acquisition of La Brigade de Buyer, an international group known for its culinary, pastry, and cutlery brands such as Buyer and Sabatier. Interparfums has reported quarterly revenue exceeding 200 million euros, meeting its targets for the year with a fiscal year revenue of 880.5 million euros, reflecting a 10.3% growth compared to the previous fiscal year. Additionally, Safran is reportedly considering acquiring certain activities of Eviden, with the sale amount still under negotiation. Technip Energies has also announced that it has been chosen by the German company Uniper to perform the detailed front-end engineering design (FEED) for a new gas-fired power plant with carbon capture.

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