(CercleFinance.com) – The Paris stock market has suffered a small contraction in its gains since 4 p.m. (after the test of 7,350) but remains on a bullish course with +0.45% towards 7,335, the index being notably driven by Stellantis and Axa (+3.5 to +4%).
The Euro-Stoxx50 did even better with +0.6% at 4,270, in the wake of the DAX which gained almost +0.7%… while Wall Street which had lost 2 to 2.5% on Tuesday and stagnated the day before, is picking up cautiously from +0.4 to +0.5%.
Several US figures have just been released: US GDP increased by 2.7% at an annualized rate in the fourth quarter of 2022 (against 2.9% expected), according to the second estimate from the Commerce Department.
Consumption in the 4th quarter is revised down sharply from +2.1% to +1.4% and unemployment continues to decline with weekly registrations down -3,000, to 292,000, i.e. a low of almost 50 years.
The market environment remains quite logically disturbed by these robust employment figures: the fear of further rate hikes could rock an economy that seems to be escaping recession for the time being.
Last night’s release of the ‘minutes’ of the Fed’s latest Monetary Policy Committee (FOMC) meeting showed that several officials at the institution remained in favor of a bigger interest rate hike of 50 basis points due to the persistence of high inflation.
Investors, however, felt that these ‘minutes’ did not bring any element capable of modifying their expectations in terms of rates, which have been revised significantly upwards in recent weeks.
While at the end of January, the Fed’s final rate forecast was estimated at 4.9% by June, the markets are now expecting a final rate of more than 5.3% in July, see maybe even 5.60%.
However, as William De Vijlder, the chief economist of BNP Paribas, reminds us, ‘the higher the final rate, the greater the probability of a rough landing’.
On the rate side, the day had started cautiously, but buyers are resolutely taking control and an easing is taking place in Europe.
Our OATs erased -7.5Pts at 2.945%, the Bunds -6.6Pts at 2.471%.
In the United States, the improvement remains more modest with -3Pts on the ’10 years’ at 3.923%, but the ‘1 year’ remains stable around 5.05/5.06% after the figures of 2:30 p.m.
Regarding company news, EssilorLuxottica is claiming a record year in 2022 with adjusted net income group share up 23.3% to €2.86 billion and adjusted operating margin at 16.8%, an improvement of 70 basis points compared to the 2021 pro forma.
Arkema announces a 30.2% increase in net current income for 2022 to 1.17 billion euros, or 15.75 euros per share, and an EBITDA at an all-time high of 2.11 billion, up by 22.2%, an improved margin of 0.2 points to 18.3%.
Bouygues publishes net income group share down 13.5% to 973 million euros for 2022, but claims to have achieved its annual objectives with, excluding Equans, current operating income up by 152 million euros and a turnover increased by 8%.
Finally, Getlink reveals a net result of 252 million euros for 2022, against a loss of 229 million the previous year, and an EBITDA tripled (+ 198%) to 886 million, after provision of an amount of 142 million related future ElecLink profit sharing.
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