Summary
In a remarkable resurgence echoing across Europe, the Paris Stock Exchange dances to a jubilant tune, reaching dazzling heights and breaking records one after another, like a soaring eagle catching thermal winds. On a vibrant Friday morning, the CAC 40 index soared to an impressive 8,256.71 points, marking a 0.84% rise, surpassing its earlier high set on March 28. London and Frankfurt mirrored this upward trajectory, buoyed by the continent’s economic revival that promises renewed prosperity. As the Paris stock market flourished, it not only etched a new session record but also resonated with the spirit of its fellow European exchanges. The CAC 40 concluded the day at 8,219.14 points, a new closing record, with an audacious mid-session peak of 8,259.19 points—an exhilarating climb past its previous landmark of 8,253.59 points from late March. This upward momentum is mirrored in other financial hubs: London’s indices have been pushing new limits since late April, and Frankfurt celebrated its own record the previous Thursday. Amsterdam basked in the glow of its own highs, and the broader Stoxx 600 index painted a similar picture of success, while major indices from Italy, Spain, and Poland hovered near their 2024 peaks. Wall Street, too, watched closely, with its major indices teasing their all-time records, adding to the electric atmosphere of optimism. Over the week, the CAC 40 surged by 3.29%—its best weekly performance since January. This rally not only rebounds from prior declines but also signals a robust recovery that has erased April’s setbacks, a month that seemed reluctant to let go of its gloomy shadows. In the backdrop lies a familiar specter: inflation. In the U.S., prices cling stubbornly to their upward march, showing little sign of retreat (CPI recorded at 3.5% in April). This uncertainty has challenged investors’ confidence that the U.S. Federal Reserve will ease its grip on the economy come 2024. Interest rates on U.S. Treasury bonds leaped sharply in April, climbing from 2.79% to 3.12% on 10-year French bonds—a move that usually casts a pall over equity markets. However, May breathed fresh air into the outlook: The U.S. Fed signaled at its meeting that further rate hikes were off the table and hinted at impending reductions. The latest employment data from the U.S. hinted at a cooling job market, which the Fed regarded as a positive sign, while oil prices took a substantial dip, shedding 9% from Brent crude, following April’s peaks. In Europe, the European Central Bank signaled intentions for a rate cut in its next June meeting—a prospect welcomed by investors, with similar expectations swirling around the Bank of England. Switzerland and Sweden had already taken the plunge into lower rates. “We’re feeling very optimistic about interest rate reductions, and that’s fantastic news for equities,” affirmed Florian Ielpo, head of macroeconomic research at Lombard Odier IM. Zooming out from monetary policy, the overall economic momentum appears to bolster investor sentiment. In the U.S., where 2023 saw robust growth, the anticipated slowdown is perceived positively, easing concerns for the Fed. Across the Atlantic, markets joyously reacted to optimistic indicators signaling economic recovery after the eurozone narrowly averted recession, while the U.K. actually slipped into one. Activity indicators for April in the eurozone (PMI) demonstrated notable improvements, and recent data from the UK’s Office for National Statistics revealed a 0.6% GDP increase in the first quarter—surpassing analysts’ projections. Meanwhile, whispers of a rebound in China flicker promisingly for leading French companies. The season’s rush of corporate earnings reports unfolded with favorable narratives, dispelling initial fears of an economic slowdown. Companies like Safran, Schneider Electric, Saint-Gobain, Thales, L’Oréal, Legrand, Michelin, and TotalEnergies topped or approached new valuations, their successes weaving a tale of resilience and strength in the current market landscape. The symphony of economic revival continues as Europe and beyond find themselves on an upward trajectory, painting a vivid panorama of hope, ambition, and renewed trust in the future.
Original Source: www.leparisien.fr
