CAC 40, Crédit Agricole, Airbus, Engie, Carrefour… on the Momentum program

The CAC 40 performed much less favorably than Wall Street this week, but the selection of stocks on the stock market from Momentum, Capital’s investment letter, performed well.

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The CAC 40 did not shine this week. Indeed, after having (very briefly) benefited on Wednesday morning from the prospect of the election of Donald Trump, the flagship equity index of the Paris Stock Exchange subsequently fell into the red, with investors worrying about the unfavorable consequences. of a new Trump mandate for Europe. In particular, Donald Trump’s threats of a new trade war (with the specter of a sharp increase in customs duties) could harm certain sections of the CAC 40, notably luxury (LVMH, Christian Dior, Hermès and Kering), aeronautics, automobiles and steel, judges Allianz GI, who notes that these sectors of activity are relatively exposed to the American market.

While the French stock market remained under pressure, real fireworks were seen this week on Wall Street. The S&P 500 has gained nearly 4.7% since the close on Friday, November 1 and is approaching the major psychological bar of 6,000 points (at the time of writing). The Dow Jones also increased by 4.7% over the period. As for the Nasdaq, rich in technology stocks, it gained 6.1%! The contrast between the enviable performance of the American stock market and the disappointing performance of the CAC 40 (-0.7%) and the Eurozone stock market (+0.50%) is striking to say the least. In addition to fears linked to Donald Trump’s policy with the Old Continent, the European stock market has also suffered from the political crisis in Germany, which is creating a vacuum in European politics, warns LBP AM (La Banque Postale Asset Management).

Also read: Stock market: a buoyant context for the CAC 40 and European stocks?

Wall Street is boosted by hopes of Donald Trump’s pro-growth policy

Wall Street has been galvanized in recent days by strong enthusiasm for Donald Trump’s pro-growth, pro-business agenda. Indeed, the new Republican president has promised massive tax cuts, huge spending and deregulation (which should particularly benefit the energy and finance sectors). And the probable control of the House of Representatives by the Republican party, after the presidency and the Senate, reinforces these hopes, underlines LBP AM.

The stock market would, however, suffer from a possible increase in inflation, linked to Donald Trump’s expansionist policy.

The other side of the coin, however, is the very expansionary budgetary policy envisaged by Donald Trump, the possible massive increase in customs duties desired by the billionaire as well as the prospect of large-scale deportations of migrants and drastic restrictions on immigration ( which should generate wage tensions due to the shortage of labor that such measures should cause) could well bring additional inflation and derail the trajectory of the monetary policy of the Fed (the American central bank) in 2025. Thus, compared to the Fed’s September estimates, the financial community has revised sharply upward the expected level of the US key rate next year.

The CAC 40 was under pressure, but Momentum’s stock selection did better

While the weekly performance of the CAC 40 was in the red, the stock selection of Momentum, Capital’s daily premium investment letter, generally recorded a much more enviable performance from one Friday to the next, the image of the big gains observed on Thales shares (+7.8%), Vallourec (+4.9% this week and even +8.7% since our new bullish anticipation, in the space of just three days) , Saffron (+4.4%) or Technip Energies (+3.6%), among many other good performances given the global context.

Also read: Stock market: why invest in stocks for the long term