CAC40: sets out again to attack 7,140 helped by W-Street and rates
(CercleFinance.com) – The Paris Stock Exchange is back in the green, around 7,140 points, a well-identified level of resistance (the Euro-Stoxx50 also shows +0.3%).
Wall Street is clearly accelerating the pace: after +0.6% at the opening, gains have doubled or tripled with +1.2% for the Dow Jones, +1.5% for the S&P500 and +2.2% for the Nasdaq.
This erases the losses of the previous day: the Fed announced last night that it intended to continue its rate hikes and did not plan to reduce them this year despite concerns surrounding the health of the banking system.
But the -1.5% fall in the US indices was more linked to a statement by Janet Yellen ruling out the scenario of a rescue of regional banks, leaving their creditors and shareholders to face their responsibilities (while systemic banks remain unfailingly supported by the Fed and the government).
Unsurprisingly, the Fed on Wednesday raised its federal funds rate target by a quarter point, while saying it was considering further rate hikes in the face of still higher-than-expected inflation.
Regarding the recent shocks experienced by the financial markets, the Fed acknowledged that the banking turbulence was likely to affect both growth and employment in the United States. The Treasury considers that it is not necessary for the moment to set up new rescue plans for the American banking sector.
The job market remains very robust in the United States: weekly claims for unemployment benefits in the United States fell by 1,000 last week, thus settling at 191,000 against 192,000 the previous week, according to the Labor Department .
This score remains very close to the historic lows observed over the past 50 years.
The number of people regularly receiving benefits increased slightly by 14,000 to reach 1,694,000 during the week of March 11, the last week available for this statistic.
The surprise of the day comes from sales of new homes (+1.1%) which continued to rise in the United States in February despite the rise in real estate prices and the rise in borrowing rates.
The Commerce Department reports sales hitting an annualized 640,000 units last month, marking a third straight increase.
But this improvement must be put into perspective because over one year, sales show a decline of 19%.
Sales of new properties in the south of the country, which alone account for more than half of transactions, rose 3% last month, while they jumped 8.1% in the west.
The median price of new homes rose further to $438,200 from $426,500 in January and $427,400 in February 2022.
Across the Channel, the Bank of England has just raised its key rate by 25Pts to 4.25% and is optimistic about inflation, believing that it would slow to a rate higher than its previous estimates.
The Swiss National Bank (SNB) raised its key rate by 50pts to 1.50% and reaffirmed that the Swiss banking system remains very solid, despite the setbacks of Credit Suisse.
On the rate side, a clear easing took place after the sharp deterioration that had occurred the previous day and yields fell back close to those tested on Tuesday: our OATs fell by -12Pts to 2.733%, Bunds by -12Pts to 2.21%, Italian BTPs down -11 Pts to 4.06%.
Across the Atlantic, T-Bonds are improving very slightly: -3.5 Pts to 3.465%, the yield spread should benefit the Dollar but this is not the case: the greenback is still down 0.4%, now trading around 1.090 against the euro.
Despite the decline on Wall Street, oil prices reversed course and US light crude (West Texas Intermediate, WTI) recovered 1.7% to 71.2 dollars.
The ‘Brent’ resumed +1.6% and tested $77 in London.
Gold, the safe haven par excellence, took advantage of the decline on Wall Street and the dollar in a ‘flight to quality’ movement which took the fine metal up 1% to 1,980 dollars an ounce, still close to the highest historic highs.
In the news of French companies, Valneva (-2.5%) announces that it suffered a net loss of 143.3 million euros in 2022, against a loss of 73.4 million the previous year, as well as a Negative adjusted EBITDA which fell from 47.1 to 69.2 million year-on-year.
Voltalia (10%) publishes net income group share of -7.2 million euros for the past year, compared to -1.3 million in 2021, and stable EBITDA at 137.4 million (-10% at constant exchange rates), penalized by the deconsolidation of power plants sold in November 2021.
Aubay publishes record net income group share at 35.6 million euros for 2022, compared to 34.4 million in 2021, and an operating margin on activity down 0.2 points to 10.4%, for a turnover growth of 9.1% to 513.5 million.
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