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CAC40: falls back towards 6.940, our OATs deteriorate by +30pts/b


(CercleFinance.com) – New ‘saloon doors’ episode for stock market indices: after peaking around 7,066 pts this morning, the Paris stock market dropped around -1% to 6,940 pts.
The balance sheet for the week has changed from green to red in a few hours, from +0.7% to -0.7% now.

The Euro-Stoxx50 drops -1.4% towards 4.080, in the wake of Frankfurt which drops by -1.7% (the DAX threatens 15.100).
On Wall Street, the very surprising ‘NFP’ pushed up US rates, which impacted the S&P500 (-0.5%) and the Dow Jones (-0.9% to 34,800).
The NASDAQ is up 0.6% but a good part of this rise is due to Amazon’s +10% at $2,725.

The high point 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.

The reaction of the bond market is quite negative since the 10-year T-Bonds climbed by +10.5Pts, from 1.827 to 1.932%, and the ‘5-year’ jumped from 0.700% to 0.80% (the highest since March 2020).
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 -20% towards 17E, causing Orpéa (-13%) which recorded this noon a new low of 33.2E (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 result group share more than doubled (+ 109%) to 2.6 billion euros (4.51 euros per share) and an operating result on activity (ROPA) 4.7 billion, compared to 2.9 billion in 2020.

Peugeot (-5.7%) 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 European leadership in the B-SUV segment (PC+LCV EUR30).
Renault fell by -4.5% by contagion: overall the low number of registrations (compared to the end of 2019) is frankly becoming a handicap.

Finally, Saint-Gobain announces that it has signed an agreement to sell its regional glass processing activity Baltiklaas OÜ in Estonia to Polar Glass OÜ, a subsidiary of Barrus AS, the largest producer of glued laminated timber in Estonia.

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