It's a classic scenario on the eve of the "3 Witches" session, which concludes an almost exclusively bullish month on the stock market, with a cascade of all-time highs on Wall Street... and this Thursday, it's Europe's turn.
The Paris stock market (+0.8%) has been trading at historic levels since the very start of trading this morning, around 7,745 points (+0.9%), driven by the automotive sector with notably +6.4% for Renault and +5.5% for Stellantis following the publication of their respective results last night and this morning (see below).

European equity markets are also in record territory, with the Euro-Stoxx50 at 4,750pts and the DAX (+0.6%) back above 17,000pts.

The disappointment comes from Wall Street, where new records were expected this morning, but the gains are disappointing, apart from the Dow Jones which is up +0.4
. The S&P500, on the other hand, is only up +0.2% at 5.010 (although it did hit the '5000' to end the month on a high note) and the Nasdaq stagnated at around 15,880, whereas it was expected to rise above 16,000 this morning.

The news on the US economic front remains reassuring, with the notable exception of retail sales, which clearly disappointed by falling more sharply than expected (-0.8%)...
But this was offset by all the other figures of the day: manufacturing activity recovered spectacularly in New York State in February, as the local Fed's 'Empire State' index climbed 41 points on January to stand at -2.4.

In the details of the survey, new orders fell slightly, while shipments rose slightly. Employment levels were little changed, while the average working week decreased.

The pace of input price rises accelerated for a second consecutive month, and that of selling prices also picked up. The six-month outlook improved, although optimism remained subdued.
The Philly Fed Index returned to positive territory with a gain of +16 points in February, reaching 5.2, the first positive reading since August.
However, only 27% of companies responding to the survey reported an increase in activity this month (but this is better than the 16% in December).
The employment sub-component fell by 9 points to -10.3 in February, its lowest level since May 2020.

New jobless claims fell (a figure closely watched by the FED): the Labor Department announced 212,000 new jobless claims in the US for the week of February 5, down by 8,000 on the previous week's revised figure (220,000 instead of the 218,000 initially announced).

The four-week moving average - more representative of the underlying trend - came out at 218,500 for the same week, up 5,750 on the previous week's revised average.

The majority of markets still believe that the Fed will not cut rates before June, but the hypothesis of a cut as early as May does not seem to have been totally ruled out (consensus 40%) after today's statistics.

The fixed-income markets are easing a little after signing one of their worst sessions since October 2023 on Tuesday. The yield on ten-year Treasuries is down to 4.207% (-5.5pts), while the German Bund is down -2pts to 2.32% and our OATs no less than 2.9pts to 2.801%, while Italian BTPs are down -5.5pts to 3.866%.
The euro is up +0.5% to $1.0780, gold is back above the $2,000 mark (+0.5% to $2.005/Oz) and Brent crude oil (+0.8%) returned to Tuesday's levels at $83.

In French company news, Renault last night published financial results described as historic, with net income of €2.3 billion, up €3 billion on 2022.

Stellantis announced this morning a 6% increase in net sales for 2023, to 189.5 billion euros, while net income rose by 11% to 18.6 billion euros, with industrial free cash flow reaching 12.9 billion euros (+19%) compared to the previous year.

For 2023, Safran reports a 72% increase in net income (group share) to 2.03 billion euros, as well as recurring operating income of close to 3.17 billion euros on an adjusted basis, representing a margin improvement of one point to 13.6%.

Airbus reports adjusted EBIT up 3% to 2.21 billion euros in the fourth quarter, slightly below the consensus target of 2.27 billion euros. Sales rose by 11% to 22.89 billion euros in the last three months of the year, against market expectations of 22.25 billion euros.

Finally, Schneider Electric reported a 15% increase in net income (group share) to four billion euros, with adjusted EBITA of 6.41 billion euros, representing a margin of 17.9%, and organic growth of 180 basis points.

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