Published on Nov 13, 2023 at 2:52 PM Updated on Nov 13, 2023 at 3:53 PM
The Paris stock exchange is making minimal progress this Monday in markets that do not want to commit too much before the release of US inflation figures for October, which could influence the monetary policy of the Federal Reserve. The consensus formed by Bloomberg predicts a rise in the consumer price index of 3.3% year-on-year, compared to 3.7% in September, and 1.9% after 2.2% for the producer price index. If the slowdown is confirmed, it would only confirm, in the eyes of the market, that the Fed will not further raise its rates in the current cycle and that it will aim for a reduction towards the middle of 2024.
Around 3:45 PM, the Cac 40 gained 0.25% to 7,062.8 points with a trading volume of 760 million euros.
Elsewhere in Europe, the German DAX gained 0.25%. In London, the FTSE 100 rose by 0.43% while the British pound briefly strengthened after the dismissal of the British Home Secretary, Suella Braverman. The future of the ultra-conservative minister in the government was hanging by a thread, but another controversy related to the Israel-Hamas war sealed her fate. The subsequent mini-reshuffle allows former Prime Minister David Cameron to take over the helm of diplomacy.
Wall Street is bending at the start of the session, lightly affected by Moody’s downgrade of the outlook on the American credit rating to “negative.” However, the rating agency maintains the debt rating at AAA, the highest level, following the downgrades by Fitch (in August) and S&P (in 2011) to AA+. The decision by Moody’s is seen as “more embarrassing than meaningful,” according to Marc Chandler, chief strategist at Bannockburn Global. “Moody’s was the exception. It is catching up with Fitch and S&P.” One of Moody’s arguments for its decision is the discord between the Republicans and Democrats, each of which presides over a chamber of Congress. If the two sides fail to agree on a budget for 2024 by Friday at midnight, the federal government’s operations will be disrupted (“shutdown”), among other repercussions, affecting the salaries of 1.5 million federal employees.
Mega-contract between Boeing and Emirates at the Dubai Airshow
Boeing’s 4.8% increase limits the damage for the Dow Jones index (-0.06%). The American aircraft manufacturer is starting the Dubai Airshow with a bang by securing an order from Emirates for 95 aircraft for $52 billion. In addition to this mega-contract, Bloomberg reported that China is considering lifting the freeze on purchases of Boeing 737 Max aircraft.
It is likely that this issue will be at the center of discussions during the meeting between Joe Biden and Xi Jinping on Wednesday, the first in almost a year. The US and Chinese Presidents will take advantage of an APEC summit in San Francisco to renew their dialogue, given the particularly tense relationship between the two powers for many months. Taiwan, spy balloons, technological warfare, and even the return of Chinese pandas from American zoos are just some of the points of tension between Washington and Beijing. Experts are keeping expectations low for the outcome of this meeting, which is more of a symbolic gesture. “We are not expecting a show of love or any lasting resolution, but there could be a period of grace,” noted Helen Zhu, head of investments at Nan Fung Trinity, to Bloomberg.
Orpea launches a capital increase
On the corporate side, quarterly reports are relatively scarce this week. Alstom is expected to report on Wednesday for the first half of its fiscal year. In the US, the retail sector will take the spotlight with Walmart and Target.
Meanwhile, Orpea is down 8% after announcing a capital increase of around 3.9 billion euros to reduce a portion of its debt as part of its financial restructuring.
The oil engineering group Technip Energies is down 1.5% following a two-notch downgrade from Barclays, from “overweight” to “underweight.”
