The mood remains gloomy on the Paris stock exchange, which is down 0.7% to around 7,925 points, notably dragged lower by defense stocks such as Thales (-3.2%) and Safran (-2.6%). This follows the United States unveiling a 28-point peace plan for Ukraine.
The Paris market was also rattled by Wall Street's sharp reversal yesterday, with the Nasdaq plunging 2.1% and the S&P 500 dropping 1.5%--a move of rare magnitude not seen since last April.
The euphoria surrounding Nvidia's spectacular results quickly faded (the stock fell 2.7% after an initial 5% gain), failing to dispel concerns over the valuation levels of US tech stocks.
However, the most striking move came from the 'VIX', the CBOE volatility index known as the 'fear gauge', which soared 19% to a peak above 28.2 during the session before closing up at 26.
After more than six months of near-continuous gains, volatility appears to have made a comeback in the markets and could become the norm through the end of the year.
This renewed nervousness primarily highlights investors' lack of confidence in the continuation of the Federal Reserve's rate-cutting cycle, which until now seemed a foregone conclusion.
Yesterday's US jobs report, which far exceeded expectations, has led investors to reconsider the likelihood of another rate cut next month.
According to the latest FedWatch tool data, the market now seems resigned to a Federal Reserve 'pause' on December 17, with only 35% of traders still expecting a move from the central bank--down from more than 98% betting on further easing just a month ago.
Following Wall Street's lead, Tokyo's Nikkei dropped 2.4% on Friday.
While awaiting further developments from the Fed, the European morning was animated by the first results from S&P Global's monthly PMI surveys of private sector purchasing managers.
The flash HCOB composite PMI for overall activity in the eurozone came in at 52.4 in November, edging down slightly from October's 52.5, but still signaling robust growth in private sector activity.
In France, the flash HCOB composite PMI for overall activity rebounded from 47.7 in October to 49.9 this month, its highest level since August 2024, indicating near-stagnation in private sector activity for November.
The synthetic business climate indicator for France, calculated by INSEE based on business leader responses, rose by another point to 98 in November, moving closer to its long-term average of 100.
With renewed uncertainty over Fed policy likely to keep investors on edge, it seems unlikely that equity markets will return to the calm that prevailed earlier this year.
With earnings season over and US economic indicators returning after six weeks of 'shutdown', investor attention will now shift to the American economy and the Federal Reserve, searching for the slightest sign of economic conditions or potential changes in monetary policy.
This promises continued turbulence for equities, and investors who had grown accustomed to buying the dips after rare bouts of weakness may find themselves disappointed this time.
In the bond market, the 10-year French OAT yield stands at 3.46%, compared to 2.69% for the equivalent German Bund, a spread of 77 basis points.
In London, Brent crude is down 1.5% to $62.2. The euro is steady against the dollar at $1.152.
In French corporate news, Veolia announced an agreement with Enviri to acquire Clean Earth, calling it "its largest and most transformative acquisition since the merger with Suez, both for accelerating its growth in the United States and in the American hazardous waste sector."
After a week-long suspension, Ubisoft returned to the Paris market at 10 a.m. today with the release of its half-year results. The group posted an adjusted net loss attributable to the group of EUR37 million for the first half of its 2025-26 fiscal year, compared to a loss of EUR208.1 million a year earlier. Non-IFRS diluted earnings per share came in at -EUR0.28, versus -EUR1.64 last year. The stock was up nearly 11% by late morning.
Canal+ announced last night it has secured the renewal of 100% of its exclusive rights to the UEFA Champions League, Europe's most prestigious football competition, allowing it to continue broadcasting the tournament in France until 2031, to the "great relief" of analysts covering the stock.
