The CAC index has inched lower in the Wednesday session. Currently, the CAC is trading at 5,382.30, up 0.40% on the day. On the release front, there are no French or eurozone events on the schedule. Earlier in the day, ECB President Mario Draghi spoke at an ECB conference in Frankfurt. Draghi addressed structural reforms in the eurozone economy, but did not discuss the ECB’s monetary policy.
The CAC has not posted a winning daily session in almost two weeks, but that streak could be over on Wednesday. European stock markets are in green territory, as European corporate earnings for the third quarter are being released. Earnings for the third quarter are expected to be 4.5 percent higher than a year ago, and the positive sentiment has led to gains for almost all of the companies on the CAC. In the financial sector, BNP Paribas (PA:BNPP) is leading the way, with a strong gain of 1.37%. Credite Agricole is also higher, up 0.58%.
What’s next for Catalonia? The cat-and-mouse game between the Spanish and Catalan governments continues, as a Thursday deadline looms. The Spanish has given Catalan President, Carles Puigdemont until Thursday to recant his declaration of independence. If Puigdemont refuses, Madrid has threatened to trigger Article 155 of the Spanish constitution, which would allow the central government to disband the Catalan parliament and impose direct rule. However, this clause has never been used, and could set off a violent reaction in Catalonia, with emotions already at a fever pitch. The deepening constitutional crisis has led hundreds of companies to start leaving Catalonia, and the Standard and Poor’s rating agency has said that the region could face a recession if the situation is not resolve. Investment projects are at a standstill in the region, and if the situation worsens, investors could get nervous and the European stock markets could respond with losses.
Economic Calendar
Wednesday (October 18)
- 4:10 ECB President Mario Draghi Speaks
*All release times are GMT
*Key events are in bold
CAC, Wednesday, October 18 at 6:00 EDT
Open: 5369.80 High: 5382.80 Low: 5359.50 Close: 5382.30
