The Paris Stock Exchange experienced a midday decline, dropping by 1.2% amid concerns over Donald Trump’s potential economic emergency declaration regarding tariffs. By the end of trading, losses were limited to 0.49%. Meanwhile, U.S. labor data showed a decrease in unemployment claims, but private sector job growth was slower than expected. European economic indicators revealed declining industrial orders in Germany, while France’s trade deficit improved. The dollar strengthened against the euro, and several companies reported mixed financial performances.
Paris Stock Exchange Experiences Midday Drop
The Paris Stock Exchange, after maintaining stability throughout the morning, faced a sudden decline of -1% by midday, further dropping to -1.2% around 1 PM, settling at 7,040 points. This downturn followed a CNN report indicating that Donald Trump might declare a ‘national economic emergency’ concerning tariffs.
By the end of trading, however, the Paris index managed to limit its losses to -0.49%, closing at 7,452 points. This shift in market sentiment sharply contrasted with a previous report from the Washington Post that had caused the CAC40 and E-Stox50 indices to surge by +2%. That report suggested Trump was inclined to compromise and abandon ‘universal tariffs’, although it was later denied. Despite this, the markets had already reacted strongly to the news.
U.S. Labor Market and European Economic Concerns
The situation appears increasingly complex as CNN’s report has introduced a chilling effect on the markets. Meanwhile, Wall Street showed resilience with the Dow Jones, S&P 500, and Nasdaq remaining stable despite Trump’s controversial statements. This stability is surprising given the long-term rates and a yield spread of 350 points between S&P values and risk-free ‘treasuries’, a level not observed in 23 years.
In terms of employment data, the latest statistics from the U.S. Labor Department reveal a decrease in new unemployment claims, which fell by 10,000 to 201,000 for the week ending December 30. Additionally, the ADP survey highlighted a slower growth in private sector job creation, with only 122,000 jobs added in December, falling short of the expected 130,000.
Across Europe, economic indicators paint a troubling picture. Germany’s industrial orders dropped by -5.4% in November, according to Destatis. The EU’s Economic Sentiment Indicator (ESI) also fell by -1.7 points to 94.5, while the eurozone’s dropped by -1.9 points to 93.7, as reported by the European Commission’s monthly survey.
In France, however, the trade balance showed improvement, with November’s deficit reducing to 7.08 billion euros from 7.52 billion the previous month, driven by a 2.9% increase in exports. As the markets look forward to the release of the Fed meeting minutes at 8 PM, traders remain cautious about the Fed’s future rate cuts amidst mixed signals from officials.
Currently, the Dollar remains strong, gaining +0.35% against the euro, reaching an annual high around 1.027$/E. In corporate news, Trigano reported a significant revenue decline of 17.4% for its first quarter of 2024-25, while Solutions30 is expanding its footprint in Poland’s Electric Vehicle Charging Infrastructure market. Lastly, Vallourec has achieved its target of zero net debt ahead of schedule, reducing its net debt by over 240 million euros in Q4 2024.