It was a historic session as both the CAC40 and the CAC40 'global return' simultaneously broke new all-time records, reaching 8,280 and 26,680 points respectively. The Dow Jones also shattered its own record, surging by 1% to close at 48,430 points.
The Paris Stock Exchange extended its winning streak, adding 1.4% to the 1.3% gains posted on both Monday and Tuesday, amounting to a 4% rise over three sessions. This rally occurred on the back of minimal trading volumes, suggesting that the absence of counterparties is fueling bullish volatility. The CAC was driven higher by Publicis (+2.9%), CapGemini, and BNP Paribas (+3.2%).
The continued rise on Wall Street—particularly for the Dow Jones, as the S&P 500 and Nasdaq showed more hesitation—was inspired by recent progress in the United States towards a potential end to the government shutdown. This development allowed the Paris market to break its downward trend, which had persisted since October 27. However, the upcoming calendar may prove too thin to sustain this rebound.
After a recent pause in the months-long rally, investors are now questioning whether the market is experiencing a crisis of confidence, or if this is merely a brief distraction in an otherwise deeply bullish trend.
"The end of a shutdown generally supports equity markets, as it unblocks funds distributed by the U.S. Treasury, revives consumption among recipients of the Supplemental Nutrition Assistance Program (SNAP), and reduces disruptions to flights," analysts at Jefferies recalled.
The imminent reopening of U.S. federal agencies will also allow investors to finally access economic indicators necessary to gauge the strength of growth. However, these statistics could also trigger a new bout of volatility. Some professionals expect the Department of Labor to release the long-delayed September jobs report as early as this Friday, after its postponement in early October.
If data confirm recent challenges in the U.S. labor market, it would bolster the case for another Federal Reserve rate cut next month. Conversely, stronger numbers could undermine the favorable scenario underpinning the recent equity rally.
One of the main concerns remains whether the valuations of American tech giants, especially those tied to AI, have reached unsustainable levels. Yesterday's announcement that Japanese conglomerate SoftBank had sold its entire stake in Nvidia put investors on alert. Nvidia shares dropped nearly 3% following the news, while SoftBank plunged 10% in Tokyo this morning.
The key question now is whether buyers have enough firepower to keep pushing the market higher. While Wall Street's lofty levels could prompt profit-taking, such pullbacks have consistently attracted dip-buyers, a trend that could be reinforced in the final months of the year, which are typically strong for markets.
The counterargument is that much of the good news is already priced in, limiting the scope for further gains. Bulls have recently shown signs of fatigue, and given current levels and key technical supports, it would not be unrealistic for them to lock in profits earlier than usual this year.
On the economic data front, after two consecutive months of acceleration, German inflation eased somewhat in October, mainly due to falling energy prices, according to final figures released Wednesday by Destatis, the federal statistics office. The German-standard consumer price index rose 0.3% month-on-month and 2.3% year-on-year, in line with preliminary estimates.
In the bond market, U.S. 10-year Treasury yields remained steady at 4.07%, while 30-year yields dropped 3 basis points to 4.67%.
French OATs improved by 4 basis points to 3.382%, while 10-year Bunds stood at 2.647% (-1 bp), narrowing the OAT/Bund spread to 73.5 basis points. Meanwhile, the French government is set to avoid a censure vote, and the Banque de France is forecasting 0.7% growth in 2026 and 0.9% in 2027.
In London, Brent crude fell 2.5% to $63.5 per barrel. The euro remained broadly stable (-0.1%) against the U.S. dollar, hovering around $1.1580.
In French corporate news, LVMH announced that its watches division has acquired a minority stake in Swiss manufacturer La Joux-Perret, a recognized leader in the design and production of some of the world's most sophisticated watch movements.
TotalEnergies announced the signing of a 15-year power purchase agreement (PPA) to supply Google with a total of 1.5 TWh of certified renewable electricity from the Montpelier solar plant in the U.S. state of Ohio.
Spie reported the signing of an agreement to acquire 89% of PIK, a Berlin-based company employing around 170 people and operating mainly in northern and eastern Germany.
Finally, Imerys announced the launch of a cash tender offer for its EUR600 million bonds bearing a 1.5% interest rate and maturing on January 15, 2027, originally issued on January 17, 2017.
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