Published January 6, 2023, 5:42 pm
The least that can be said is that the Bedroom 40 started the year 2023 with a bang. The Parisian index recorded four sessions higher in five days, offering a weekly gain of 5.98%, the highest since November 2020.
Friday’s session began quietly, the stock market lost some fractions pending the official report on American employment. The latter, published at 14:30, woke up the market. The Cac 40 closed at the highest for the day, at 6,860.95 points, up 1.47%, with a transaction volume of 3 billion euro. Beyond the Atlantic, green also wins: the Dow Jones and the Nasdaq Composite rose 1.6% and 1.5%.
In December, the world’s largest economy created 223,000 nonfarm jobs, and the unemployment rate fell to its lowest level in 50 years, at 3.5%. At first glance, these figures are not enough to allay the US Federal Reserve’s (Fed) concerns about tensions in the labor market and the effectiveness of its action to “cool” the economy and counter inflationary tensions. Only that the average hourly wage component shows that wages have continued to grow but at a slower pace. Over one month they increased by 0.3%, double compared to November, and by 4.6% over one year (5% estimated), against 5.1% in the previous month. That ” suggests that wage growth is slowing. [Mais] we still expect the labor market to weaken more markedly this year as the economy enters a recession commented Capital Economics.
Meanwhile, this statistic alone shouldn’t divert the Fed from its trajectory. In the minutes of its last meeting, released on Wednesday evening, the monetary institution indicated that it had noticed tensions in the labor market, adding that the fight against inflation is not over and that monetary policy could remain permanently restrictive on the economy. On the market, we expect a rate of Fed-funds over 5% in June after Atlanta Fed Chairman Raphael Bostic’s comments that the Federal Reserve ” they still have work to control inflation.
Interest rates at 3% in the eurozone?
In the Eurozone, European Central Bank interest rates are expected to peak by summer “, if we are to believe François Villeroy de Galhau, the governor of the Banque de France. However, he believes it is still too early to determine the terminal level. The latter will largely depend on the evolution of inflation. In December, the latter slowed down. The overall annual rate fell below 10%, to 9.2% over one year. The calm in energy prices explains this slowdown, but, measured excluding the more volatile components (food and energy), inflation settled at 5.2% against a stability of 5% expected by the market. ” Falling inflation and improving economic sentiment in December suggest eurozone stagflation is not as bad as feared a few months agoAnalysis of the economy of capital. However, a technical recession remains likely and we expect the ECB to raise its key rate to 3% in the coming months. »
On the value front, Engie it lost 3.03%. The President of the Republic Emmanuel Macron has urged energy suppliers to renegotiate” excessive contracts of very small businesses, which it considers abusive. down too, Danone (-1.83%) was affected by the downgrading of Morgan Stanley from “line weight” to “underweight”.
In reverse, Saffron gains 3.03% thanks to Bernstein, now “outperforming” the engine manufacturer’s stock.
In the end, Sodexo it lost 1.19%. The collective catering group has confirmed its financial targets for the year ending at the end of August 2023, on the back of the publication of higher than expected revenues in the first quarter. However, he warned that the post-Covid recovery effect would gradually wear off. For analysts, the stock’s potential is limited as the stock jumped nearly 50% in the second half of 2022.