(CercleFinance.com) – The Paris Stock Exchange (+0.4 to +0.5%) stalls below 7,120 as this rebound develops in anemic volumes.
There will be no decisive jump on the eve of the weekend and the CAC40 will remain anchored below 7,150, despite the publication of an ‘NFP’ at 2:30 p.m. which could have reassured.
As a good surprise, the ‘official’ US job creations in June came out well below expectations (209,000 against 245,000 expected) and completely contradict the river figures published by ADP the day before (+495,000)… whose publication would have caused the downward spiral observed the day before (dropout of more than 3% of the day before).
The decline in stock market indices was coupled with a sharp rise in bond yields in the prospect of a tightening of the Fed’s monetary policy.
The markets should therefore have been reassured this Friday, but the ‘NFP’ stands out as a ‘non-event’ and neither the stock market indices nor the bond markets have experienced any improvement since 2:30 p.m.
It is even quite the opposite with a CAC40 which erases half of its gains posted around 2:15 p.m., OATs and Bunds continue to deteriorate or are struggling to relax, the week ends on a tension of +25Pts to +30Pts (for Italian construction), it is the taking into account of a possible additional rate hike this fall.
The T-Bonds even shot up from 4.04 to 4.10% before returning to 4.043%.
Wall Street remains in the red with a Dow Jones at -0.2% (it had rebounded strongly from its lows the day before), the S&P500 stagnated at 4.412, the VIX remaining more or less unchanged (but it will have stretched by + 2pts at 15.5 this week, after a peak at 17 on Thursday).
The Parisian market experienced a difficult week, characterized by four sessions in the red (for a cumulative decline close to -3.8%), a consolidation movement which finally led it to break through its major support of 7,350 then 7,150 points.
For several months, some analysts have been concerned about the ‘cognitive dissonance’ of the markets, which favor the ‘pink’ scenario of an absence of recession (‘soft landing’) and a rapid normalization of inflation.
Job creations in June in the United States slowed markedly in June in the United States, but the unemployment rate fell to 3.6% (against 3.7% in May) and wage increases exceeded expectations, delivering a still mixed picture of the labor market.
The number of jobs created was 209,000 last month, while the market expected 245,000. In addition, the statistics for May and April have been revised downwards, respectively from 339,000 to 306,000 jobs and from 294,000 to 217,000 (i.e. -110,000 in total).
Average hourly earnings increased by 12 cents, or 0.4% to nearly $33.6, giving an annual salary increase of 4.4%.
The morning figures had little impact on the CAC: France’s trade balance stood at -9.2 billion euros in May 2023 according to the General Directorate of Customs. It was stable over the month, after recovering by 0.3 billion euros in April.
Imports and exports both increased by 0.4 billion to reach 60.5 billion euros and 51.3 billion euros respectively.
France’s current account balance recorded a deficit of 700 million euros in May, after a deficit revised to 1.7 billion in April, according to CVS-CJO data published Friday by the Banque de France.
On the foreign exchange front, the Euro resolutely resumed its ascent to 1.0950, or +0.5%, Gold resisted and even recovered by +0.3% towards $1,923.
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