(BFM Bourse) – Difficult session on the Paris Stock Exchange, with the CAC 40 losing more than 1% Friday evening. A more robust than expected employment report could undermine the scenario of a reduction in the Fed’s key rates in June.
The time for records is over, it’s time to breathe on the Paris Stock Exchange which is retreating in the face of numerous adverse winds.
The CAC 40 thus closed down 1.11% to 8,061.31 points to post its second biggest drop of the year, after the session of January 3 (-1.58%). Over this shortened week, the major barometer of the Parisian market therefore lost 1.76%, and returned below the closing levels of March 12 at 8,087.48 points. That’s three weeks of increase gone up in smoke…
Two factors revive risk aversion. The first comes from restrictive statements on the monetary policy of the American Federal Reserve (Fed). The president of the Minneapolis branch of the American central bank, Neel Kashkari, raised the possibility that the Fed would not lower its rates if inflation persisted.
In this tense context, the market took note at the beginning of the afternoon of the American employment report for the month of March. And the job market in the United States remains very robust, with creations clearly above expectations at 303,000 jobs in March, where the expectations of economists surveyed by Wall Street were only 200,000 jobs. The unemployment rate fell, as expected, to 3.8% last month, compared to 3.9% in February.
“The unemployment rate is clearly not increasing in the United States, which directly questions the Fed about the need to reduce rates,” notes Florian Ielpo, head of macroeconomic research at Lombard Odier Investment Managers.
This report “does not really change the situation and gives Jerome Powell time to organize the sequence of rate cuts”, notes Bastien Drut, head of Strategy and Economic Studies. These figures therefore demonstrate the robustness of the American economy, and encourage the American Federal Reserve not to be in a hurry to initiate its first reduction in its key rates.
Geopolitical tensions
Meanwhile, investors must contend with a rise in geopolitical risk, leading to a rise in oil prices to peaks in October 2023. Israel announced Thursday that it had strengthened its defense measures following threats from Tehran. Iran said it would retaliate for the attack on its consulate in Damascus that was blamed on Israel.
In this context, the June contract on North Sea Brent gained 0.8% to $91.33 per barrel and the May contract on WTI listed in New York gained 0.6% to $87.12 per barrel. . Which also fuels market fears of continued inflationary pressures.
This rise in oil prices benefits the star of the Totalenergies rating which recorded an absolute high during the session, at 67.38 euros.
Outside the CAC 40, we can cite Wendel which gained 0.8% after announcing the sale of 9% of the capital of the tests, inspections and certification specialist Bureau Veritas, which limited its decline to 0.7%.
On other markets, the euro is stable against the dollar at 1.0840 dollars, after falling at the start of the afternoon in the wake of the American employment figures.
Sabrina Sadgui – ©2024 BFM Bourse