After 8 consecutive sessions in the green, the Paris stock market continued its insolent ascent on Friday, climbing 1% to 7,970 points, driven by a surge in luxury goods with +9.4% for Kering, +3.4% for L'Oréal, +3.2% for LVMH and +2.3% for Hermès, in the wake of Burberry (+15% in London), whose results were hailed by the markets.

After underperforming US stocks last year, and indeed for several years, European equities have been enjoying a comeback in recent weeks, driven by valuations deemed undemanding.

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

This technical rebound has yet to be confirmed, however, by the preliminary PMI indices measuring private-sector activity in France, the UK and the eurozone, expected later this morning.

These figures should 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", stresses Michael Brown, market strategist at Pepperstone.

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

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", he warns.

Today's economic agenda looks relatively quiet in the USA, although it will be marked by old home sales and the Michigan consumer confidence index.

On the earnings front, investors will be watching the lunchtime releases from American Express and Verizon.

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, compared with SEK 3.4 billion a year earlier.

With the return of risk appetite to equity markets, bonds are mechanically less attractive, leading them to continue their recent consolidation.

The yield on the ten-year German Bund thus climbed two points to 2.52%, while that on the OAT with the same maturity deteriorated by four basis points to 3.30%, giving a France/Germany spread of 78 points.
On the other side of the Atlantic, the ten-year Treasuries rate rose by four points to 4.64%.

The euro confirmed its comeback, gaining 0.8% against the greenback to $1.05.

In London, Brent crude rose by 0.8% to $78.5 a barrel.

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 3% the day after the events specialist announced sales of 431 million euros for the fourth quarter of 2024, an increase of over 4% and higher than the 410 million expected by Oddo BHF.

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