(BFM Bourse) – The Paris Stock Exchange remains on a good path, after having closed the first week of the year at its highest since February 2022. The CAC 40 closed up 0.7% back on 6,900 points then that Beijing removed the health restrictions linked to the entry of travelers into China the day before. Investors are also hoping to see the Fed ease off its rate hikes after the US jobs numbers released on Friday.
The Paris Stock Exchange remains on its beautiful momentum printed since the beginning of the year. The CAC 40 rose by 0.68% to 6,907.36 points on Monday, to return to levels of mid-February 2022.
Over the whole of last week, the Parisian star index had taken almost 6%, achieving in passing its best performance since the end of March 2022.
Hope for a less aggressive tone from the Fed
Up slightly at mid-session, the Paris star index then accelerated, driven by the good performance of the indices on Wall Street. At the close of European markets, the Dow Jones gained 0.8%, the S&P 500 rose 1.4% while the Nasdaq advanced 2.2%.
“The latest disappointing economic data on Friday allowed the markets to rebound and could now lead to the resumption of a certain uptrend”, recalls Vincent Boy, market analyst at IG France.
The ISM services index for the month of December in the United States, thus proved to be significantly lower than expected on Friday after US employment figures, the publication of which had carried the equity indices. This latest publication notably reported a marked slowdown in the increase in hourly wages.
“These statistics fuel the camp of those who believe that the Fed [Réserve fédérale américaine] could be less hawksish [restrictive] over the next few months,” says John Plassard of Mirabaud.
With this in mind, investors will follow Jerome Powell’s speech on Tuesday at an event organized by the Swedish central bank.
“In addition, the inflation figures expected on Friday could comfort investors in their idea of an accommodating monetary policy from 2023,” adds Vincent Boy.
On Wall Street, operators therefore firmly believe in the hypothesis of a slowdown by the Fed in its rate hike rate. According to the CME Group’s “FedWatch” barometer, investors estimate at more than 77% the probability of a rise of only a quarter of a point in the rate target of the “Fed funds” after the FOMC on the 1st february.
Earlier in the day, investors welcomed the official lifting of the quarantine on entering the territory in China. Announced in December, this measure officially came into force on Sunday, allowing foreign travelers to cross Chinese borders. The three years of closure of the country due to the health crisis have thus come to an end.
As for the indicators published on Monday, the unemployment rate in the euro zone stood at 6.5% in November, stable compared to the previous month. This shows “that the labor market held up better than expected at the end of last year,” said Capital Economics.
Oil goes up
At the level of values, Ipsen took over 0.5% after announcing the acquisition of the American biotechnology company Albireo for an initial amount of more than 950 billion dollars.
Euroapi gained 3%. The former subsidiary of Sanofi announced on Monday an investment of 40 million euros to set up a new technology for the production of vitamin B12 on its site in Saint-Aubin-lès-Elbeuf, in Seine-Maritime.
On the other hand, Renault lost 1.5%. The title suffered from a lowering of recommendation from Citi to “neutral”. The diamond group also communicated on Monday the result of its employee shareholding plan “Renaulution Shareplan” which saw more than 40,000 employees subscribe to additional shares.
Ubisoft fell 3.3%, penalized by the plunge of Frontier Developments, another London-listed publisher which abandoned its 2023 financial targets.
On other markets, the euro advanced 0.8% against the dollar to 1.0748 dollar. The reopening of China keeps oil prices rising. The March contract on Brent from the North Sea rose 1.3% to 79.61 dollars a barrel while that of February on WTI listed in New York rose 1.5% to 74.85 dollars a barrel.
Sabrina Sadgui – ©2023 BFM Bourse