The CAC 40 Index, which tracks the biggest French companies, continued its strong rally, reaching its highest point since March this year as investors cheered some key earnings. It rose to a record high of €8,270, up by 22% from its lowest point this year.
CAC 40 Index rose after key earnings
The main catalyst for the CAC 40 Index has been the relatively better-than-expected financial results by luxury brands. LVMH stock price jumped to €635, its highest level since March 11 and 42% above its current level.
This performance happened as the company reported a return to growth in the third quarter. Its revenues had dropped in the previous two consecutive quarters.
Kering stock price has moved from being the worst CAC 40 company to one of the best. It has jumped by 135% from the lowest point this year after it reported better-than-expected numbers.
One notable aspect is that Hermes, which was the best-performing company in the index, has lagged the others. It has crashed by 25% from its highest point this year.
Other CAC 40 Index companies that published strong results this week were Renault, Vivendi, Sanofi, and Orange.
Top CAC Index earnings to watch
The CAC 40 Index will react to earnings by top French companies next week. The first major one will be BNB Paribas, which has come under pressure in the past few days. It has plunged from a high of €81.93 to €68, its lowest level since May 6.
The other top French banks, like Credit Agricole and Société Générale will release their numbers on Friday. The other top names to watch will be Airbus and TotalEnergies.
On top of this, the index will react to earning by top American companies like Microsoft, Amazon, Meta Platforms, and Apple. These stocks normally have an impact on global equities.
ECB and Fed interest rate decisions
The other top catalyst for the CAC 40 Index will be the upcoming European Central Bank (ECB) interest rate decision on Thursday.
Economists expect the bank to leave interest rates unchanged as inflation has remained near 2%. On the other hand, there are rising odds that the Federal Reserve will cut interest rates by 25 basis points in this meeting.
The CAC 40 Index does well when key central banks are cutting interest rates as this normally reduces the yields in the bond market.
Donald Trump and Xi Jinping meeting
The CAC 40 Index will also be on edge as investors watch the upcoming meeting between Donald Trump and Xi Jinping at the APEC Summit in South Korea.
This meeting aims to de-escalate a situation that has gotten out of hand in the past few weeks. For example, Trump has hinted that he may block software sales to China if the country blocks rare earth materials.
China, on the other hand, has hinted that it will block rare earth materials and impose some tariffs on Chinese goods. The hope is that this meeting will help to solve the ongoing trade dispute,which will boost the stock market.
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