The quarter ended in euphoria, with the CAC40 gaining +1.3% to 7,405 (or +2.5% in 48H), in the wake of luxury champions LVMH, Hermès and Kering (with gains of +2 to +3.3%).
The CAC40 was held back slightly by the S&P500's -0.45% decline, while the Dow Jones (-0.1%) remained close to 35,000Pts.

The CAC index has in fact just gained +250pts in a straight line since Wednesday morning, rising from 7,185 to 7,435, i.e. more than 3% overall.

The 3rd quarter, which was still losing -3% from a stock market point of view 48 hours earlier, will end on a gain of +0.5%, which is somewhat unexpected, especially after a 10th rate hike to 4%... even if it is the last.
And even the bond markets - which rose sharply just after Ch. Lagarde's press conference - now seem to have doubts about this: the previous day's gains have vanished, with OATs back from 3.12% to 3.192%, Bunds tightening from 2.595% to 2.651%, and Italian BTPs recovering +8pts to 4.435%.

With bond markets set to end the week close to their lows for the current year, the message is hard to interpret: is this simply a return to risk-on at the expense of safety?

"The eurozone economy is already weakening enough to make a further rise in inflation highly unlikely", says Martin Moryson, Chief European Economist at DWS.

Some strategists even go so far as to consider that the risks are now tilted towards further cuts in key rates than the market currently expects.

We think that the rate cut will only come in the second half of 2024, and later than the market expected, but we also think that once the easing cycle begins, the rate cut will probably be faster and deeper than previously anticipated", predicts Sebastian Vismara, senior economist and strategist at BNY Mellon IM.

The markets will now focus their attention on the Federal Reserve, which is due to hold its monetary policy meeting next Tuesday and Wednesday.

In the opinion of analysts, the recent rise in oil prices since the end of the state is likely to push the Fed to maintain a restrictive approach.

The many signs of resilience in the US economy, confirmed yesterday by much better-than-expected retail sales, could also push the Federal Reserve to continue on the path of monetary tightening.
Today's figures also point in this direction: manufacturing activity in the New York area rebounded by +21pts to +1.9 according to the Fed's September Empire State Manufacturing survey.
The survey reveals a slight drop in employment levels, while the pace of sales price increases accelerated.

On the inflation front, the latest figure shows that US import prices rose by 0.5% in August, following a 0.1% rise in July (a figure revised by the Labor Department, which clarifies that excluding fuel, import prices fell by 0.1% in August, as in the previous month).
For their part, export prices rose by 1.3% in August, after +0.5% the previous month (revised figure), but over the last 12 months, US import prices have fallen by 3% on a gross basis (-0.8% excluding petroleum products), and export prices have contracted by 5.5% (-5.3% excluding agricultural products).
Industrial production and consumer confidence in Michigan remain to be seen.

There were also figures from the Eurozone: the eurozone trade balance stood at +2.9 bn euros in July 2023, down sharply on the previous month (+8.6 bn), according to Eurostat's seasonally-adjusted data.

This sharp month-on-month deterioration in the trade surplus reflects both a 0.7% increase in eurozone imports and a 1.7% contraction in exports.

For the EU as a whole, the trade balance fell from +8.1 billion in June to +1 billion the following month, with exports down 2.2% and imports up 1.2%.

On the FOREX, the dollar confirms its gains of the previous day, and is down just -0.1% at 1.0660 (after a low of 1.6035).
Oil remains at its zenith on the NYMEX, at over $90.5 (+0.5%), while Brent crude is beginning to pull back in Europe after a pullback below $94.6 in London this morning.

In news from French companies, TotalEnergies announces that it has signed a memorandum of understanding with Petrobras and Casa dos Ventos Holding to assess the prospects for joint projects in renewable energies and low-carbon hydrogen in Brazil.

Virtual prototyping software publisher Esi Group reports net income for the first half of 2023 down 59.2% to 5.7 million euros, with adjusted EBIT margin stable at 30.9% of sales.

Lastly, Vinci Construction Grands Projets announces that it has been selected to design and build a 180,000 m3 liquefied natural gas tank in the Netherlands. The work, worth 160 million euros, is scheduled for completion by the second half of 2026.

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