CAC 40 Drifts Midday on October 31 Amidst Targeted Gains and Losses

A Market Searching for Direction After a Pivotal Week

The upcoming weekend unfolds against a backdrop of relative calm following a crucial week marked by US monetary easing and the European Central Bank's decision to hold rates steady. The Fed cut its rates by 25 basis points on Wednesday, a move expected to boost risk appetite; however, Jerome Powell's cautious stance significantly dampened enthusiasm. Investors, having been disappointed by consistently unmet optimistic expectations for months, are now becoming much more selective. The slight pullback of the CAC 40, paired with the fourth consecutive session of decline, perfectly reflects this mindset: no disaster is imminent, but there is a certain fatigue in a context where positive macroeconomic news is no longer sufficient to justify valuations deemed ambitious. US markets themselves showed signs of consolidation on Thursday, with the Nasdaq retreating 1.57% following profit-taking on tech stocks. This transatlantic correction naturally resonated in Paris, where investors are processing a week full of events that could have descended into chaos but ultimately ends in relative stability.

Renault and Société Générale lead the way in gains

Amid a struggling CAC 40, certain stocks are standing out for their strength. Renault is leading the winners with a 1.78% rise, closely followed by Société Générale at 1.74%, both cyclical stocks benefiting from renewed investor confidence. Safran, with a 1.11% increase, rounds out the top three, which is dominated by companies linked to economic recovery and the financial sector, areas typically hampered by the prospect of low interest rates. Bureau Veritas with a 0.92% gain, and Stellantis, up by 0.71% after a prior 8.75% plunge, signal a renewed interest in stocks previously seen as too burdensome or risky. Capgemini, the tech consulting giant, is up 0.57% this Friday due to revised upward revenue growth forecasts for 2025, a positive indicator in an otherwise pressured tech sector. The rest of the gainers list showcases a series of stocks with gains ranging from 0.46% to 0.27%, including Eurofins, Airbus, Crédit Agricole, TotalEnergies, and Engie. This array of winning stocks, dominated by cyclicals, financials, and a few major industrials, suggests a cautious resurgence of confidence in economic fundamentals, tempered by the modest scale of these gains.

AXA and Saint-Gobain Dampening Spirits as Weakness Gradually Spreads

Conversely, the negative side of the day shows two spectacular declines that stand out against the overall backdrop. Saint-Gobain drops 3.1% while AXA falls 3.08%, two giants of the French economy seeing investors opting to take their profits. Beyond these two behemoths, a whole constellation of renowned stocks is losing ground: Hermès International (-0.87%), Véolia Environnement (-0.92%), Michelin (-1.25%), Kering (-1.41%), all prestigious names that illustrate a certain fatigue against the valuations reached. Accor (-1.14%) and Bouygues (-0.76%) suffer from distrust in the real estate and construction sectors, while Air Liquide (-0.67%), L'Oréal (-0.63%), and Orange (-0.36%) reflect a decreasing risk appetite in portfolios. This breadth of decline, although measured, with decreases rarely exceeding 3%, nonetheless remains telling. Investors are methodically sorting, gradually abandoning defensive or less dynamic stocks in favor of more promising segments. This reshuffling of portfolios, visible in the contrast between winners and losers, suggests that professionals are already anticipating a selective recovery rather than a generalized market surge.