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CAC40: ends the week below 7,000pts, the NFP surprises


(CercleFinance.com) – After peaking at 7,066 pts this morning, the Paris Stock Exchange ended the session at 6,951 pts, a daily decline of 0.77%. The weekly results are also negative, with the Parisian index falling by 0.3%.

For its part, the Euro-Stoxx50 dropped -1.4% today to 4,083, in the wake of Frankfurt, which fell by -1.7% (the DAX threatened 15,100).

On Wall Street, the very surprising ‘NFP’ (ie the non-farm payroll indicator) pushed up US rates. On Wall Street, the S&P500 is in equilibrium, the Dow Jones yields 0.3% and the Nasdaq gains 0.8%, notably driven by the good momentum of Amazon (+12% to $3,114).

The 10-year T-Bonds climb towards 1.925%, and the ‘5-year’ jumps from 0.700% towards 0.80% (the highest since March 2020).

The highlight of the week was the ‘NFP’: it’s a huge surprise since job creations are up by +467,000 (including +444,000 in the private sector).

This score is at the antithesis of the -301,000 listed by ADP and expectations which ranged from -125,000 to +180,000.
But there is more: December creations are revised more than double, from +199,000 to +510,000.

In November, this went from 249,000 to 647,000: thus +709,000 jobs over 2 months were ‘found’ by adjusting the previous data… and we must add 300,000 jobs which were not forecast in January (see 500,000 for some people).

The average number of creations over the last 3 months comes out at +541,000/month, that’s 3 times more than the 180,000 anticipated when integrating the median forecast for January: such a margin of error is quite simply historic.

In addition, the unemployment rate rose slightly to 4.% against 3.9% and this is totally inconsistent with the upward revisions of the NFP) and the +0.3% increase in the labor force rate, at 62.2% against 61.9.

Hourly earnings increased by +0.7% to $31.63 against +0.5% expected.

Investors were able to take note this morning of the production figures for the manufacturing industry in France. In December 2021, production was virtually stable (+0.1% after −0.6%), but fell slightly across industry as a whole (−0.2% after −0.5%), after CVS-CJO data from INSEE.

Compared to February 2020 (last month before the start of the first confinement), production remains down in manufacturing industry (−5.9%) as well as in industry as a whole (−5.3%) .

Production in the last quarter of 2021 was lower than in the same quarter of the previous year in manufacturing industry (−0.5%), as in industry as a whole (−0.5%).
The OATs will end the week at their lowest, with a yield which tends symmetrically by +8Pts towards 0.666% (+30Pts over the week), the Bund posting +7Pts towards 0.2210% (i.e. +25Pts over the week, starting -0.047% last Friday).

In the news of values, Korian could in turn be the victim of embarrassing ‘revelation’ (France-2 survey awaiting publication) and plunged -16% towards 17.5E, dragging Orpéa (-12.4%) which registered a new low of 33.2E this afternoon (unheard of for 10 years).
Sanofi reports activity EPS of 6.56 euros for the past year, up 15.5% at constant exchange rates, and free cash flow of 8.1 billion euros, doubling over three years and above the 2022 target.

Vinci posted, for its part, for 2021, a net profit group share more than doubled (+ 109%) to 2.6 billion euros (4.51 euros per share) and an operating profit on activity (ROPA) 4.7 billion, compared to 2.9 billion in 2020.

Peugeot (-3%) recorded an increase in registrations of +5% in 2021 compared to 2020, driven by the success of the 208 which becomes the European market leader in all segments (PC+LCV EUR30) and by the 2008 which takes the European leadership in the B-SUV segment (PC+LCV EUR30).
Renault fell by 4% by contagion: overall the low number of registrations (compared to the end of 2019) is frankly becoming a handicap.

Finally, Saint-Gobain (-2.7%) announces that it has signed an agreement to sell its regional glass processing business Baltiklaas OÜ in Estonia to Polar Glass OÜ, a subsidiary of Barrus AS, the largest glass producer. glulam in Estonia.

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