Paris stocks rebound as Carrefour takes a heavy hit from store looting

Macro & central banks

• Philippines: the central bank raised its policy rate by 50 basis points to 5.25%, well above the 25 basis point hike the market expected. The cumulative increase in this cycle now reaches 125 basis points, and inflation jumped to 7.2% year on year in September, its highest level since April.
• South Korea: the Bank of Korea held its base rate at 3.00% after two 25 basis point hikes in July and August. The won firmed (USD/KRW at 1,324.44, down 0.2%), while the KOSPI lost 0.7%.
• France: the 10 year government bond yield moved above 5% intraday on Wednesday.

Indices & tech

• CAC 40: closed at 7,921.68 points on Wednesday October 21 (+1.06%), back above 7,900 but still down 2.80% since the start of the year.
• US futures: on Thursday at 9:08 a.m., the S&P 500 was down 1.0%, the Nasdaq 100 down 1.7% and the Dow down 0.5%.
• Meta: the stock rose after quarterly revenue beat expectations and the company gave solid guidance for the current quarter.
• Tesla: the stock fell after the company lowered its annual sales target. According to some sources, insiders are reportedly worried about regulatory scrutiny of a possible merger with SpaceX.
• EssilorLuxottica: up 15.48% to 173.80 euros. Quarterly revenue reached 7.486 billion euros (+9%), helped by connected glasses (+20%), but the stock remains down 35% since January.
• Atos: up 13.8%, with its first net positive cash generation (44 million euros) since launching its restructuring plan.
• Carrefour: down 13.80% to 14.05 euros, the biggest decline in the index. About fifty stores were looted, and the group estimates the impact at 80 to 200 million euros on its current operating income. It now targets a current operating margin improvement of 0 to 15 basis points, down from 25 previously.

Geopolitics

• According to the New York Times, the United States and Israel have drawn up plans for new strikes on Iran, targeting its energy infrastructure, nuclear facilities and missile arsenal, after the US midterm elections.
• Some US planners believe a three day campaign could inflict enough economic damage to push Tehran into nuclear negotiations. Donald Trump has postponed new strikes several times and has not yet approved a new operation.

What to watch today

• How US futures open at the start of the next session, after Thursday's decline.
• The reaction of French luxury and retail names: EssilorLuxottica and Carrefour remain the most discussed stocks from the previous session.
• The French 10 year yield, which crossed 5% intraday.
• Any announcements on Iran, given that strikes have already been delayed several times.