(CercleFinance.com) – The Paris stock market is slowly falling back into the red (-0.2%) and the CAC40 is ricocheting below 7,100, in low volumes (1.7 billion euros), investors limiting initiatives to a few hours of the highly anticipated decisions of the US Federal Reserve.
The Euro-Stoxx50 returns to equilibrium around 4.165 while the US indices fall sharply back into the red after their burst of euphoria on January 31: the Dow Jones yields -1%, the S&P500 and the Nasdaq fall -0, 5%.
The strategic committee (FOMC) of the Fed must indeed announce this evening its monetary policy decisions and its president Jerome Powell will hold a press conference in stride.
Futures contracts suggest an almost certain rise of a quarter point 25 basis points, a more modest increase than the 50 points in December and the 75 points decided in November.
The reason for this slowdown in the pace of this monetary tightening is to be found in recent inflation statistics, which show a steady decline since last summer.
But it is above all Powell’s speech that will be scrutinized closely: according to analysts, the Fed boss should remain focused on inflation and economic activity, which seems to be resisting more strongly than expected.
On the statistical front, the S&P Global PMI buyers’ index for French manufacturing recovered from 49.2 in December 2022 to 50.5 in January, thus returning above the 50 mark (which separates growth and contraction of activity) for the first time since August.
In addition, the final PMI index for the manufacturing industry in the euro zone stood at 48.8 in January, against 47.8 in December 2022, thus reflecting a further slowdown in the contraction of the sector, with an attenuation of the cost pressures.
The latest US figures preceding the Fed’s press release are disappointing with a -1pt contraction in manufacturing activity in the United States for the third month in a row in January.
The monthly survey by the Institute for Supply Management (ISM) published on Wednesday came to 47.4 last month, against 48.4 in December, while economists expected a more limited decline, around 48.
The sub-index for new orders fell sharply, to 42.5 from 45.1 the previous month, while that of prices paid rose sharply, to 44.5 from 39.4 in December (this last figure is the worst).
On the employment side, the private sector in the United States created only 106,000 new jobs in January, a figure down sharply from the previous month, and well below consensus, according to the monthly survey of the services firm. in ADP human resources.
“We saw the impact of weather-related disruptions on employment in our reference week, but hiring was stronger in the other weeks of the month,” said Nela Richardson, chief economist at ADP.
US long rates eased -2.5Pts towards 3.5030% and the Dollar relapsed -0.3% towards 1.0910E, which says a lot about operators’ conviction in terms of the imminent ‘pivot’ of the EDF.
In Europe, our OATs deteriorated by +2.5pts to 2.772%, Bunds posted +2pts to 2.3010%, Italian BTPs by +3pts to 4.296%.
In the news of French companies, Bonduelle posted revenue for the first half of its 2022-23 financial year of 1.24 billion euros, up 13.6% of which 6.1% on a like-for-like basis, Favorable changes in currencies boosted business growth by +7.5%.
Orpea (-22% to 5.50%) announces an agreement in principle on a financial restructuring plan – very dilutive for minority shareholders – with a group of third-party French investors led by Caisse des Dépôts et Consignations, and a group of financial creditors holding about 50% of its unsecured debt.
Eiffage Construction will build a biomass power plant to decarbonize industrial activity and reduce dependence on natural gas for Norske Skog.
Finally, Getlink announced on Wednesday the commissioning by its subsidiary Eurotunnel of a new rail power supply technology to enable it to increase its transport capacity in the Channel Tunnel.
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