(CercleFinance.com) – The Paris Stock Exchange (+1.55% to 7,547) continues its bullish rally in ‘euphoria’ mode and garners +2.5% over the past week: this is the 6th week of progression without any retracement greater than 0.6% and in the United States, the record for sessions of increase without any ‘consolidation’ (a term which has disappeared from the stock market vocabulary) is broken for the S&P500 (+0.4% to 4,607, new absolute record and record of July 27 equaled) over this 6-week interval.
The CAC40 for its part is only 30 Points away from its best historical closing in mid-April: investors only see the glass half full, even with figures that contradict expectations, notably the ‘NFP’ published in 2:30 p.m. (+199.00 jobs) which causes a sudden rise in rates (between +9 and +10 basis points).
In other words, rates have been falling since October 25, this is very favorable for stocks (which were only 10% of their historic highs) and now that rates are rising, it is very favorable for stocks because growth turns out to be more resilient than expected… hence new absolute records for the euro-Stoxx50 with +1.1% to 4,523Pts and a ‘highest’ for the CAC40 since July 31 or 19 may).
The CAC40 like the Euro-Stoxx50 are driven by luxury with notably +3.5% for Kering and for LVMH (which has just purchased a new 6,500M² building on the Champs Elysées for €1 billion according to various sources (i.e. a price per square meter record of more than 150,000E, an absolute record).
The session was marked by the highly anticipated monthly report
on employment in the United States published at 2:30 p.m. by the Department of Labor.
The consensus of +145,000/+150,000 is largely exceeded with almost +200,000 and the unemployment rate expected to increase to 4.00% is in reality down sharply from -0.2% to 3.7%.
Nothing is in line with expectations, including the downward revisions for the previous 2 months: the consensus was -50,000 and it is -35,000.
This statistic, which is well above expectations, will complicate the task of the Federal Reserve in recalibrating its monetary policy: the speech it would give this December 13 (final FOMC press release) could be more ‘hawkish’ than Wall Street hoped.
This results in a clear tension on the bond with a US ’10 year’ which displays +13Pts at 4.2540% and it is not much better in the Euro zone with +8Pts on the Bunds at 2.2760% and +9Pts on our OATs at 2.836%… and Italian BTPs show +10 Points at 4.061%.
The euro fell by -0.25% around 1.0775 dollars, to a two-week low, and crude oil prices, which saw fears surrounding global demand dissipate with the robust ‘NFP’ of the day, were trying to a small rebound after setting new six-month lows yesterday.
Note, however, a greater contraction than expected in Japanese GDP in the 3rd quarter (-0.7%)… and the strong rise in the Yen in recent days towards 144/$ will not help matters (hence a second session decline of -1.7% on the Tokyo stock exchange this morning and a weekly decline of more than -3%.).
American light crude (West Texas Intermediate, WTI) rose 2.3% to 71.5 dollars per barrel while Brent gained 1.7% to 75.7 dollars, ‘Brent’ climbed +2.1% towards $76.00 in London.
In French company news, Airbus announces that Cathay Group, already one of the largest A350 operators, has become the latest air carrier to order its brand new A350F, following the signing of a contract purchase for six devices.
ArcelorMittal announces that it has finalized the sale of ArcelorMittal Temirtau, a subsidiary of its Kazakh steel and mining activities, to Qazaqstan Investment Corporation (QIC), an investment fund controlled by the State of Kazakhstan.
Finally, Euronext announced last night that Vivendi shares would return to the CAC 40 index, six months after leaving it, a decision which allowed the value to climb by more than 2.3% this Friday. on the Paris Stock Exchange.
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