The Paris stock market ended the final session of the week with a gain of 0.44%, at 7,927 points, marking its 9th consecutive session of gains and registering a weekly gain of 2.8%.

This morning, the index had even flirted with 8,000 pts (+1%), before giving back part of its gains in the second half of the session. While Pernod Ricard was the best performer of the day (+4.5%), the CAC40 benefited above all from the momentum of luxury stocks, with +4.5% for Kering, +1.1% for L'Oréal, +1.9% for LVMH and +0.9% for Hermès.

The luxury sector was buoyed by Burberry - which is now up over 9% in London - which reported a much smaller-than-expected fall in sales in the last three months of 2024, thanks to a solid performance in the USA, where the group benefited from the reopening of a store in New York.

In reality, European equities are at a significant discount to US equities - there is a 40% discount between the STOXX Europe 600 and the S&P 500", points out Christopher Dembik, Investment Strategy Advisor at Pictet AM.

Across the Atlantic, the mood is more gloomy: the S&P500, Dow Jones and Nasdaq are trading just below their equilibrium points (-0.1% approx.).

It has to be said that Wall Street was a little dampened this afternoon by certain US figures, and in particular by the marked slowdown in private-sector growth in January, according to S&P Global, whose composite PMI index came in at 52.4 in a "flash" estimate, compared with 55.4 in final data for December.

The slowdown was concentrated in the services sector, where output grew at the slowest pace since last April, while manufacturing output returned marginally to growth after five months of decline.

The second disappointment was the fall in US consumer confidence to 71.1 in its final version, compared with 74 in December, after a first estimate of 73.2, which economists were expecting to be 73.

Joanne Hsu, the report's author, explains this first drop in the index in the space of six months by the deterioration in households' propensity to purchase durable goods and the prospect of rising unemployment.

At the same time, one-year inflation expectations have risen from 2.8% to 3.3%, back above the 2.3%-3% range in which they hovered in the two years preceding the pandemic.

According to the UMich, some 47% of survey participants say they expect the unemployment rate to rise in the coming year, a figure at its highest since the Covid-related recession.

Finally, sales of existing homes in the US rose by 2.2% in December 2024 compared with the previous month, to a seasonally adjusted annual rate of 4.24 million, according to the National Federation of Realtors (NAR).

Also on the statistics front, the preliminary PMI HOCB index measuring private sector activity in France edged up from 47.5 in December to 48.3 in January, but remains well below the 50 mark, and activity remains languid in the eurozone.

These figures confirm what we already know, namely that the eurozone economy is stagnating, that the UK is mired in stagflation and that the US economy continues to outperform its counterparts by a wide margin", points out Michael Brown, market strategist at Pepperstone.

The analyst points out, however, that many uncertainties remain, mainly linked to developments in US trade policy, which could derail the current stock market rally.

He warns: "It's not in anyone's interest to take on too large a position at the moment, knowing that a setback could occur at any time, with the possibility of a Trump tweet sending the market tumbling again".

The US bond market turns around after the PMIs and the U-Mich, with T-Bonds falling back from 4.66% to 4.600% (-3.6Pts).
On the other hand, the trend remains strong in Europe, with Bunds at 2.538% (+2.5Pts) and OATs at 3.304% (+1Pt)... note that the OAT/Bund spread is narrowing to less than 77 basis points.

The euro confirms its comeback, gaining almost 1% against the greenback to $1.05.

In London, Brent crude rose by 0.7% to $78.3 a barrel.

In Europe, Ericsson announced this morning that it had posted a "solid end to the year" in 2024, with sales up 2% in Q4 and net income up to SEK 4.9 billion, versus SEK 3.4 billion a year earlier.

In French company news, Stef posted cumulative sales for 2024 of 4.8 billion euros, up 8.1% (+2.8% on a like-for-like basis), including nearly 1.26 billion for the fourth quarter, up 8.8% (+3.4% on a like-for-like basis).

GL Events gained more than 4% the day after the events specialist announced sales of 431 million euros for the fourth quarter of 2024, up by more than 4% and higher than the 410 million expected by Oddo BHF.


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