The Paris Bourse ended the first session of the week with a notable gain of +0.72%, at 7,480 points (an 8th consecutive session in the green), benefiting in particular from the support of the luxury goods sector (+3.5% for Kering and LVMH) and the banking sector (+3.1% for Société Générale and +2.5% for BNP Paribas). By late afternoon, the Paris index had even briefly broken through the 7500 pts barrier, peaking at 7511 pts (+1.1%).

Paris shrugged off the retreat on the other side of the Atlantic, where the Dow Jones dropped 0.2%, ahead of the S&P500 and Nasdaq (-0.4/-0.5%).

As expected, there was no stock market psychodrama after the censure," observes Christopher Dembik, Investment Strategy Advisor at Pictet AM.

In his view, "the market has fully grasped that a debt crisis in France is a fantasy scenario.

However, although the Paris market got back on track last week, it is far from certain that the Paris Bourse will have a very positive end to the year, says the professional.

"Now that the censorship episode is over, the question is whether a Christmas rally is conceivable for the CAC 40", asks Christopher Dembik, deeming this scenario "complicated".

He believes it would not be altogether surprising if the CAC 40 ended the year below the symbolic 7,000-point mark, which would correspond to a decline of around 7% for the year as a whole.

Moreover, fears that the ECB will opt on Thursday for a limited 25-basis-point cut in its key rates - rather than a more aggressive 50-basis-point easing - could also weigh on the trend and prevent the traditional 'Christmas rally'.

Faster rate cuts would, in our view, be better suited to the European economic situation, but the euro's decline seems to be scaring off central bankers", notes François Rimeu, senior strategist at Crédit Mutuel AM.

The session was nevertheless positive for euro-denominated debt, with -0.7Pt on Italian BTPs at 3.19%, +0.5Pt on Bunds (2.12%) and -0.5Pt on our OATs at 2.87%: the OAT/Bund spread continues to contract, now at around 75 basis points (versus 88Pts 10 days ago).
On the other side of the Atlantic, T-Bonds are down +4pts to 4.188%, and the 2-year is down +3pts to 4.1280%.

In addition to monetary policy, investors are preparing for Wednesday's release of the US consumer price index, which will be particularly closely watched a week ahead of the Fed's last meeting of the year.

According to consensus, US inflation should have accelerated to +0.3% month-on-month in November, after coming in at 0.2% in October.

On the energy market, oil prices were back on the rise on Monday, buoyed by the reappearance of geopolitical risk and concerns about unrest in Syria following the fall of President Bashar Al-Assad, but there was no panic, as Brent crude recovered just 1.8% to $72.3 a barrel (an ordinary day for black gold).

In other French company news, Alstom has announced an order worth almost 520 million euros, to supply SNCF Voyageurs with 35 additional RER NG trainsets for the RER E line in the Île-de-France Mobilités network, under the framework contract signed in 2017.

Alstom has also signed a contract with the Southern California Regional Rail Authority (Metrolink) to operate, maintain and service its regional passenger rail network. The five-year contract, valued at around $515 million (490 million euros), will run from January 1, 2025 to June 30, 2030.

Finally, on Monday, Air India announced a firm order for 100 additional Airbus aircraft, in order to meet the strong growth in air traffic in India, whose dynamism is currently outstripping that of the rest of the world.


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