Wall Street mixed as earnings season starts

Wall Street markets are showing mixed performance as the earnings season begins, with major American banks reporting varied results. Goldman Sachs exceeded expectations, while Citigroup posted its best third-quarter revenue in ten years. JPMorgan, however, disappointed despite strong activity.

European markets show slight declines

In Paris, the CAC 40 closed slightly lower at 7,828 points, with a decline of -0.07%. The index resisted a broader decline in luxury and semiconductor stocks, with LVMH (-0.1%) limiting losses after a disappointing quarterly report in its fashion and leather goods division. STMicroelectronics (-3.8%) faced renewed Chinese competition in memory chips. French banks, however, showed signs of recovery.

French government bond yields remain high

In the bond market, the yield on the ten-year French government bond eased to around 4.83%, a level still considered very high. Oil prices took a small break, with Brent crude hovering around $105 per barrel. The upcoming release of the U.S. September inflation data is expected to be a key factor, as a potential acceleration could complicate the Federal Reserve's task and maintain pressure on interest rates, particularly affecting technology stocks.

LVMH reports slower growth

LVMH reported €18.5 billion in revenue for the third quarter, with overall growth slowing to 1% compared to 3% in the previous quarter. The company's flagship division, which generates nearly 70% of its operating profits, saw a 5% decline in sales, significantly worse than the 2% drop expected by the market. The slowdown in Chinese demand, with sales in Asia excluding Japan falling by 5% after rising 4% in the previous quarter, is a major concern.

Pernod Ricard outperforms expectations

Pernod Ricard, on the other hand, reported a 6% sales increase in the third quarter in its wines and spirits division, outperforming analysts' expectations of 1%. This was driven by improved Chinese demand in cognac and champagne. The stock rose 4.90% to €65.52, while Rémy Cointreau surged 5.40% to €45.64. However, Pernod Ricard's stock has declined 11% since January, compared to Rémy Cointreau's 24% increase.

Biosynex sees stock rise after restructuring

Biosynex, a diagnostics company, saw its stock rise 2.41% to €0.85 following the validation of its restructuring plan by the Strasbourg court. This could lead to a €20 million reduction in debt. However, the company still faces challenges in repaying its debts over ten years and regaining profitability.

French companies secure better borrowing rates

L'Oréal and Air Liquide have both managed to secure lower borrowing costs than the French government, with L'Oréal issuing a seven-year tranche at 4% and Air Liquide receiving €12.5 billion in orders for an issuance at yields lower than public debt.

Memory chip sector faces challenges

The memory chip sector faced a significant setback as Chinese manufacturer CXMT announced advancements in a new DRAM architecture, causing stock declines for Samsung, SK Hynix, Kioxia, and Micron. The potential for increased supply and lower prices from China has raised concerns about the end of the current supercycle in memory chips, which has been driven by high demand from data centers for AI.

Inflation data will shape market outlook

The upcoming release of the U.S. September inflation data will be crucial for investors, as it will determine the trajectory of interest rates and impact bond and stock markets, particularly technology stocks.