(BFM Bourse) – The Parisian index closed Friday’s session up 1.87% reassured by Congress’s approval of the agreement to suspend the American debt ceiling. The trend consolidated after the US employment figures.
The Paris Stock Exchange ends the week on a very high note. Reassured by the endorsement of the US Senate, which gave the green light to the bipartisan agreement to suspend the US debt ceiling for two years, the CAC 40 gained 1.87% to 7270.69 points on Friday.
Thanks to this excellent session, the Parisian index limits its weekly decline to an anecdotal decline of 0.66%.
“Now that the agreement on raising the US debt limit has been voted on by moderates in Congress (…), the risk of US technical default is coming off the radar, at least until 2025. It is positive in this beginning of June after banking, inflation, economic and geopolitical risks weighed on the performance of assets in May”, judge Xavier Chapard of La Banque Postale Asset Management.
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A complicated American job to decipher
The trend accelerated a little after the publication of the non-agricultural US employment figures for the month of May, with job creations well above expectations at 339,000 units and an unemployment rate at 3.7% against 3 .4% in April and 3.5% expected by analysts.
This employment report “showed that hiring is not about to slow down, that layoffs are increasing and that wage pressures seem to be easing”, dissects Edward Moya of Oanda. For the latter, these indicators underline that the American economy does not show strong signs indicating that a recession is looming in the second half, which constitutes “good news in the short term for the stock market”.
Market operators are also deciphering this report to try to anticipate the decision of the American Federal Reserve (Fed) at its next monetary policy meeting on June 13 and 14. These data have so far not greatly changed the situation, since, according to the CME Group’s FedWatch tool, investors attribute a probability of 69% to a status quo on key rates and 31% to an increase in 25 basis points (0.25%), more or less the same figures as before the publication of the employment report.
Renault leads the CAC 40
On the stock side, the renewed appetite for risk favored cyclical stocks, with Renault in the lead (+5%, the largest increase in the CAC 40), ahead of ArcelorMittal (+4.7%) and Société Générale (+ 4.3%).
Nexity (+0.9%) for its part announced the sale of its development activities in Poland for 100 million euros, thus refocusing on France.
On the smallest values, AB Science (+6.4%) was driven by obtaining a patent in Canada for its flagship molecule, mastinib.
On the other markets, the euro lost 0.3% against the dollar at 1.0727 dollars. Oil contracts are advancing, also benefiting from the return of risk appetite. The North Sea Brent contract for August is up 2% at $75.77 a barrel while that for July is also up 2% at $71.58 a barrel.
Julien Marion – ©2023 BFM Bourse