The CAC 40 maintains its upward momentum at midday

Cyclical stocks dominate the session

Publicis Groupe leads the winners of the day with a rise of 3.15%, closely followed by BNP Paribas up by 2.37% and Schneider Electric with an increase of 2.15%. These three heavyweights reflect a broader movement favoring economically sensitive stocks, which investors naturally turn to when the macroeconomic outlook brightens. The luxury sector also performs well, with LVMH and Hermès showing gains of 1.88% and 1.62%, respectively, while automotive group Stellantis also rises by 1.88%. The automotive sector, which faced difficulties just a few days ago, is clearly benefiting from improved market sentiment and the easing of investor concerns. Legrand, Renault, and Crédit Agricole complete this wave of gains, with increases ranging from 1.75% to 1.86%. The banking sector, in particular, is visibly benefiting from the trend reversal, while technology, often dominant, loses ground to stocks more directly linked to real economic conditions. This shift in capital flows towards cyclical stocks signals increased investor confidence in the short-term economic trajectory, reflecting the optimism sparked by the resolution of American uncertainties.

Defensive Stocks Lagging Behind the Market

Conversely, defensive sectors and stocks considered less cyclical are forming the rear guard of the Paris market midway through the session. Edenred, the specialist in payment and engagement solutions, is experiencing a dramatic drop of 7.86%, hit by a regulatory change decision in Brazil. Carrefour shows a modest decline of 0.42%, while Pernod Ricard, the spirits giant, falls by 0.07%. Veolia, the environmental services group, also registers a slight contraction of 0.03%. Orange and Bureau Veritas remain exactly balanced. These declines, though minor for some, represent investors' shift towards stocks more correlated with the economic cycle. Defensive consumer stocks and safe havens, typically favored during times of uncertainty, are seeing their appeal diminish as geopolitical and political concerns begin to fade. This polarization between the day's winners and losers highlights the distinctly sectorial nature of the session, rather than a widespread market appreciation.

A Rebound Driven by Clarification of the American Context

The upward momentum of the Paris Stock Exchange is not purely coincidental. The resolution of the U.S. government shutdown, which had been stalled for 41 days, has removed a major source of uncertainty for global markets. American senators approved a compromise allowing federal agencies to reopen, paving the way for final presidential approval. This easing of political tensions in the United States explains the 25% decline in the VIX index, a measure of market volatility, from the peaks seen a few sessions ago. Meanwhile, the Paris market has shown resilience, significantly outperforming its American counterparts. While the S&P 500 remains flat at +0.21% and the Nasdaq drops by 0.3%, the CAC 40 is leading decisively. This French outperformance is also attributable to the sector composition of the index, where French industrial and luxury stocks are favored in an optimistic environment. The relatively sparse macroeconomic calendar should not hinder this upward momentum, as investors historically tend to maintain their risk appetite towards the end of the year.