The markets spent the session digesting Donald Trump’s election. After initial volatile trading, the Paris Bourse decided to move in a positive direction. The CAC 40 was particularly buoyed by the luxury goods sector, led by Kering.
Market trends
The Paris Bourse rallied this session after Donald Trump’s election. Yesterday, investors had gotten carried away before retracting for fear of tariffs and the return of inflation. The markets hesitated once again at the opening, but finally opted for a definitive bull run. U.S. indices, less euphoric but still in the green, maintained the upward momentum.
Wall Street is now focused on the US Federal Reserve (Fed), which is expected to announce a 25 basis point cut in key rates on Thursday November 7 at 8pm (Paris time). On the other hand, uncertainty reigns over the content of the speech by its Chairman, Jerome Powell, who could mention monetary policy forecasts. Trump’s inflationary agenda is likely to slow the pace of rate easing in the future. Against this backdrop, all U.S. indicators are seeing the dust settle. Whether it’s bond yields, the dollar or bitcoin, they’re all falling today.
Indexes in France and around the world
| CAC 40 | + 0,76% | 7,425.60 points |
| SBF 120 | + 0,77% | 5,631.18 points |
| DAX | + 1,70% | 19,378.81 points |
| FTSE 100 | – 0,32% | 8,152.75 points |
| Nikkei | – 0,25% | 39,381.41 points |
| Dow Jones* | – 0,11% | 43,682.86 points |
| Nasdaq* | + 1,23% | 19,217.36 points |
| *index closed at the close of European stock markets | ||
Fact of the day
Donald Trump’s election boosted luxury goods this session, especially Kering. Yet spirits and luxury goods are among the sectors most likely to be adversely affected by the Republican candidate’s protectionist agenda. In particular, the 78-year-old real estate tycoon wants to raise tariffs from 10% to 20% on all products entering the United States.
According to a UBS note, the return of the former president could still be beneficial for luxury companies: “We believe that Trump’s victory could bring several tailwinds for the luxury sector, including lower taxes and the resulting wealth effect.” The wealth management bank believes that the billionaire’s measures could support the US stock market, and thus improve consumer sentiment. As a result, Americans would be ready to buy luxury goods.
Second CAC 40 gain of the day, Kering thus gained 4.12%. Like other luxury groups, the world’s number two behind LVMH is suffering from sluggish consumer spending in China, and more generally in Asia. Donald Trump’s return to the White House could accelerate China’s economic recovery by forcing Beijing to roll out its new salvo of measures faster than expected. Among other luxury stocks, Christian Dior gains 3.31%, Hermès gains 3.06%, LVMH claws back 2.64% and L’Oréal is up 2.44%.
Stocks in the spotlight
The Top
ArcelorMittal continues to post lower quarterly results, albeit slightly better than expected by the analyst consensus. The stock took advantage of this to jump 6.49%, the biggest gain on the CAC 40. On Thursday, the world’s second-largest steelmaker reported a net profit that was divided by three in one year, falling to 266 million euros. Investors also welcomed Ebitda (earnings before interest, tax, depreciation and amortization) of $1.58 billion. This was at the high end of the analysts’ consensus of between $1.25 billion and $1.67 billion.
Despite this, ArcelorMittal repeatedly points out in its press release that trade measures are needed in Europe to save the sector. In mid-October, along with other European steelmakers, the group had called for “emergency measures in the face of what they consider to be “unfair.
At a time when companies are facing significant costs for decarbonized steel, they denounce “aggressive exports” from China. Recalling that it is working with the European Commission on this issue, ArcelorMittal nonetheless believes that the European Union favors low-cost imported carbon steels in a market that would be unsustainable.
The Flop
Air France-KLM fell heavily on the Paris Bourse on Wednesday. At the opening, the airline lost over 10%, before closing down 10.50%, the biggest decline on the SBF 120. This Thursday, the Group published its third-quarter figures, with operating results of down 12% to 1.18 billion euros. The airline had already warned before the summer that the Olympic period would cost it 200 million euros. The impact is now closer to 160 million euros.
In the group’s press release, Benjamin Smith, CEO, explains the reasons for this mixed result: “The third quarter revealed contrasting trends for the Air France-KLM group. Sales continued to grow, driven by the increase in our offer and supported by strong demand. However, operating income was significantly impacted by the Paris Olympic Games.”
The company encountered other difficulties, with unit costs soaring at KLM (+8.4%), but also the impact of last July’s global IT outage, which is said to have cost the company 25 million euros. Air France-KLM also took the opportunity to draw attention to the government’s plans to increase taxation on the airline sector, with a “negative impact of 90 to 170 million euros on operating income”..
Number of the day
9,000 job cuts
On Thursday, Nissan announced that it would be cutting 9,000 jobs worldwide and plans to reduce production capacity by 20%. The Japanese automaker has seen its sales drop considerably at a time when the sector is going through a difficult period. Sales fell by 5% in the third quarter.
Friday November 8 agenda
Tomorrow’s session should be quieter on paper than the previous two. Some quarterly results are still on the agenda with publications from Aperam, CMA CGM and Sony. For macroeconomic statistics, look to the United States, with the November consumer confidence index published by the University of Michigan.