The stock market is expected to retreat into Thursday’s opener after a flawless start to the week amid growing fears of a recession induced by tighter monetary policy in the US and uncertainties about the pace of reopening the Chinese economy. The futures contract for the CAC 40 star index fell 0.35% about forty minutes into the session. Since the beginning of the year, the Parisian rating has lined up three sessions of upgrading and recorded gains of 4.68%.
After a dismal 2022, European markets have been reassured this week by deflationary inflation, falling energy prices and lower bond yields favoring equities. “European indices are expected to open slightly lower this morning on Fed minutes leaving no door open for a 2023 rate cutsays John Plassard, investment specialist at Mirabaud. According to the minutes of the US central bank’s (Fed) December meeting released Wednesday evening, monetary policymakers plan to continue raising rates until inflation falls more sustainably. “No one has mentioned a rate cut in the foreseeable future, even as the market continues to show that investors are still betting that the Fed will start cutting rates by the end of this year.“, points out Ipek Ozkardeskaya, an analyst at Swissquote Bank. Statistically, investors await December’s monthly report on private sector job creation (ADP survey) and weekly jobless claims in the US.
For Mrs. Ozkardeskaya, “even the avalanche of job cuts announced by large US companies and a weaker ADP report will not be enough to convince that the job market is slowing down», a condition for the Fed to adjust its monetary policy. E-commerce giant Amazon announced Wednesday night that it would remove “just over 18,000» jobs, also in Europe. This job cut plan is the largest of recent job reduction announcements affecting the technology sector in the United States.