(CercleFinance.com) – After having lost up to 1.3% at the start of the afternoon, the Paris Stock Exchange managed to reduce its losses and ended the session with a more limited decline of 0.54%, at 6243 dots.
Across the Atlantic, Wall Street is also beginning a small recovery after a ‘heavy’ start to the session due to the intervention the day before by Jerome Powell, the chairman of the Federal Reserve, deemed ‘uninviting’.
On Wall Street, the Dow Jones rose from -0.9% to 0%, the S&P500 from -1.3% to -0.6% and the Nasdaq from -1.3% to -1%.
As a reminder, the Fed’s Monetary Policy Committee (FOMC) unanimously decided yesterday evening to raise its key rates by 75 basis points to 4.00% and postpones the moment of a ‘pivot’ towards a policy less restrictive currency.
The Bank of England has just imitated it this afternoon, with +75Pts at 3.00%… and estimates inflation at 10.9%. But the BoE warns that the final target for UK rates ‘will be lower than the market expects’.
To come back to the FED, the markets seem to have been taken aback by the rather offensive tone adopted by Jerome Powell, during his press conference, a position which contrasted with the rather accommodating posture which emerged from the press release published a little earlier.
‘He reinforced expectations that the pace of rate hikes could slow ‘from the next meeting’, but said it would be premature to pause as there is ‘a long way to go’ until the next meeting. inflation target of 2% ‘, points Wells Fargo.
“Powell also noted that the terminal interest rate will most likely be higher than previously expected as strong data and stubborn inflation increase the need for further rate hikes.”
Remarks considered more ‘hawkish’ than expected, leading market participants to anticipate a new monetary turn of 75 basis points in December, followed by another increase of 50 basis points, this time in february.
At the same time, expectations for the terminal rate – i.e. the end point of the Fed’s current monetary tightening cycle – have been revised upwards to now point to a main rate of 5.1 % by May 2023, compared to 5% so far.
It should be noted that Christine Lagarde has just declared that ‘the ECB could not content itself with following the FED’, leaving various possibilities for interpretation.
The day’s session also promised to be rich in economic indicators: two figures fell after the opening of the US markets.
According to the PMI, the contraction in the US private sector deepened again in October, ultimately to 48.2 (vs. 49.5 in September) but was revised upwards from 47.3 in the flash estimate.
Its ‘twin’, the ISM index (of the Institute of Supply Management) of purchasing managers fell to 54.4 against a consensus of 55.5 and 56.7 in September.
At the start of the afternoon, three figures had been published, starting with non-agricultural productivity which increased by 0.3% in the United States in the third quarter of 2022 at an annualized rate, according to a preliminary estimate from the Department of Labor. , after a decline of 4.1% in the previous quarter.
This modest gain reflects a 2.8% increase in production, while the number of hours worked increased by only 2.4%. Taking into account a 3.8% increase in hourly wages, unit labor costs increased by 3.5%.
The most anticipated figure this Thursday – on the eve of the publication of the NFP – was the weekly jobless claims: they unexpectedly fell by -1,000 last week in the United States (to 217,000 against 225,000 expected), suggesting continued tightness in the labor market.
The moving average over four weeks, considered a better indicator of the evolution of the labor market, also fell, signing a decline from 500 to 218,750 registrations.
The US trade deficit widened to $73.3 billion in September from $65.7 billion the previous month (which was revised from an initial estimate of $67.4 billion ), according to the Department of Commerce.
The 11.6% month-on-month increase, larger than expected by the market, reflected a 1.5% rise in imports of goods and services to $331.3 billion, and a 1.1% drop in exports, to 258 billion.
The Dollar recovered strongly by +0.7% towards 0.9760 while the yield of T-Bonds climbed by +15Pts towards 4.202%.
Our OATs and Bunds are posting +10Pts to +12Pts towards 2.7800 and 2.259% respectively.
Gold relapses heavily by -1.5%, in contact with the annual low of 1,615/1,620$.
In securities news, AXA posted total revenue of 78.4 billion euros for the first nine months of 2022, up 3% as reported and 2% like-for-like, driven by particular by a growth of 14% on a comparable basis for health insurance.
Legrand (-8% to 70E) publishes net income group share up 16.1% for the first nine months of 2022. The electrical equipment manufacturer’s sales increased by 19, 1% to reach 6.15 billion euros, including organic sales growth of 10.1%.
Despite an uncertain macroeconomic outlook, Legrand confirms its objectives for 2022, including organic sales growth of between +6 and +9% and an adjusted operating margin before acquisitions of 19.9 to 20.7%.
BNP Paribas publishes net income group share up 10.3% to 2.76 billion euros for the third quarter of 2022 (+16.4% excluding exceptional items) and gross operating income up by 11.7% (+8.9% organically) to 4.45 billion.
Stellantis reported Thursday a 29% increase in its turnover in the 3rd quarter and confirmed its annual objectives. Its net turnover totaled 42.1 billion euros in the period from July to September, compared to 32.6 billion in the same period of 2021.
CGG – the red lantern of the SBF120 – fell -24% (towards 0.69E) after the publication of Q3 sales which slowed down due to contract delays in the 4th quarter.
Copyright © 2022 CercleFinance.com. All rights reserved.
Did you like this article ? Share it with your friends with the buttons below.
