(CercleFinance.com) – Did you doubt it? Bad news in a context of central banks determined to bring down inflation is godsend for the stock exchanges, which have gone from ‘cautious’ mode to euphoria mode in the space of 2.5 hours.
The term seems appropriate with a CAC40 going from +0.6% at 2:30 p.m. to +2.3% at 5 p.m. (at 6,170).
The CAC40 index hands down the 6,100 mark again, then settled back above 6,150 to invalidate the bearish signal of Wednesday and Thursday in weekly data.
The results for the week have become much more presentable again: the CAC40 has fallen from -4% to -2% in 24 hours.
Among our neighbours, the euphoria is also at its height with +3.2% in Frankfurt (+400Pts to 13,030Pts), and this pulls the E-Stoxx50 up, with +2.6% to 3,545.
On Wall Street, the 3 main indices gained +1.1% on average and the scores were very homogeneous: an upward acceleration occurred after the publication of industrial orders in the United States. They fell by -1% in July, reflecting a slowdown in manufacturing activity according to data published by the Commerce Department.
Economists, on the contrary, were expecting an increase of 0.2%, after a gain of +1.8% the previous month.
This decline, which puts an end to a series of nine consecutive months of increases, is due in particular to a decline in orders for turbines and generators for the energy sector and a fall in orders for military aircraft.
Inventories rose 0.1%, while shipments fell 0.9%, resulting in an inventory-to-shipment ratio of 1.47, down from 1.46 in June.
The ‘NFP’ published at 2:30 p.m. had also received a good reception because it was more in line with expectations (the beginnings of moderation in the labor market).
The US economy generated +315,000 non-agricultural jobs created last month (+308,000 jobs in the private sector).
The July figure was practically not revised (to 526,000 against 528,000 initially announced) but that of June was reduced by -105,000, to 293,000.
The August figure is largely in line with expectations which were mostly in the 300,000/320,000 range.
The surprise comes from the unemployment rate which rose to 3.7% while the Reuters consensus gave it unchanged at 3.5%, like the previous month.
The labor force rate remained at 62.4%, hourly wages increased moderately by +0.3%.
‘The history of economic cycles suggests that to bring down inflation, it is necessary to go through the destruction of jobs and a significant rise in unemployment’, recall the economists of Oddo BHF.
‘To date, even if the Fed has already raised its key rates by 225 basis points, nothing like this has happened’, underlines the private bank.
And the August NFP does not announce a radical reversal of the US economic dynamic.
At the same time, the euro rose above parity with the dollar (+0.75% to 1.0025), oil rose by +2.6% in London (towards $94.6) and bond yields slackened significantly: the OAT erased -5Pts at 2.13%, the Bund -5.5Pts at 1.51% and the T-Bond 2032 -5Pts at 3.215% (the ’30 years’ slackened by 3.54% around 3.51%).
In their last market update, the Kiplink Finance teams nevertheless describe a market context that is ‘much too heavy’ to hope for a convincing rebound.
“The deterioration of the economic scenario for the past two weeks puts the Parisian index in a delicate position”, estimates the Parisian management company.
In corporate news, Societe Generale (+2.8%) amplifies the rebound of the Parisian market this Friday in the wake of an increase in the recommendation to buy from analysts at Bank of America.
In a research note published yesterday, the BofA teams indicate that they have raised their recommendation on the value, raised from ‘neutral’ to ‘buy’, with a price target raised from 28 to 35 euros.
Total Energies recovered by +3% in the wake of the barrel (+2.4% on the WTI on the NYMEX).
Air Liquide confirms its desire to withdraw from Russia, and has signed a letter of intent with the local management team aimed at transferring its activities in this country to it in the form of an MBO (management buy out).
Saint-Gobain announces that it has finalized the sale of its Saint-Gobain Glassolutions Grand Ouest glass processing activity to a group of private investors led by former managers of the building materials group. The group also announces that it has entered into exclusive negotiations for the sale of its Crystals and Detectors business.
Goldman Sachs downgraded its advice on Air Liquide shares, reduced from ‘buy’ to ‘neutral’ with a price target lowered from 174 to 124 euros. The financial intermediary says he judges the valuation of the specialist in industrial gases as “too rich” in view of the slowdown in activity that is looming in the industry.
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