The Paris stock market got off to a good start this week, gaining 0.6% to 7,087 points, led by Alstom (2.3%) ahead of Societe Generale and Stellantis (+1.8%), despite low volumes, with just under 2.5 billion euros traded since the opening.

Across the Atlantic, US indices barely reacted to Moody's decision to downgrade the US credit rating to 'Aaa' with a negative outlook (the next downgrade would take the rating to 'AA').

No further emotion on bonds, with T-Bonds downgraded by +2.5pts to 4.65%.

Nor does Moody's decision affect FOREX, with the dollar holding steady against the euro at $1.07/euro.

In Europe, bonds are at a standstill, with +1 and +2 basis points on OATs and Bunds at 3.303% and 2.728% respectively.

Chartist analysts reckon that if the Paris index were to regain its monthly high of 7110 points, its bullish sequence could take it towards 7140 and then 7180 points.

The week gets off to a slow start, but promises to be rich in statistics, with the latest US inflation figures, as well as retail sales and new data on the US housing sector.

These indicators should confirm that a slowdown in the global economy is indeed underway, but also that inflation is easing only very gradually.

Other important statistics are also expected in Europe this week, including October consumer prices, the second estimate of third-quarter GDP and the ZEW index of German investor sentiment.

These data could lead to renewed volatility in the bond compartment, which has already been subject to major roller-coaster movements of late.

Last week ended with divergent developments on both sides of the Atlantic, with a pullback in euro-denominated debt and a small technical upswing in T-Bonds despite Thursday's air pocket due to the semi-failure of a US Treasury issue.

Volatility on the long end of the yield curve remains very high, with curves still inverted despite the recent movement, which leads us to maintain a preference for the short end of the curve", stresses François Rimeu, Senior Strategist at La Française AM.

From the analyst's point of view, equity markets do not yet seem to reflect the restrictive bias currently retained by central banks' monetary policies.

For the first time in 15 years, the normalization of interest rates and more resilient inflation than expected have made investing in bonds more attractive than in equities", points out Mauro Ratto, co-founder and co-investment director at Plenisfer.

In other French news, TotalEnergies has signed an agreement with TexGen, a US company, to acquire three gas-fired power plants in Texas, representing 1.5 GW of electrical generation capacity, for $635 million.

Alstom has signed a contract worth almost $73 million with Dallas Fort Worth International Airport for the modernization and replacement of the Skylink automated people mover (APM) system.

On Monday in Paris, Alstom inaugurated the RER NG, its new-generation train for lines D and E of the Paris region RER network.

Saint-Gobain announces that it has signed a definitive agreement to acquire Izomaks Industries, a leading player in waterproofing products (floors, roofs) in Saudi Arabia, a transaction for which the financial terms are not specified.

On Monday, Orpea announced the launch of a capital increase of around 3.9 billion euros, as well as its intention to appoint a new board of directors to formalize the entry of the new investor group into its capital.

Finally, Solutions30 (+10.9%, broad leader of the SBF120) announces that it has signed an agreement with GlasfaserPlus for the deployment of a FTTH network in Germany, starting with Saarland and Bavaria.

Copyright (c) 2023 CercleFinance.com. All rights reserved.