(CercleFinance.com) – The Paris Stock Exchange (-0.05%) remains very hesitant 40 minutes from the close, oscillating between red and green (thanks to a slight relaxation in rates).
Wall Street is also hesitating between a Dow Jones at -0.2% and an S&P500 at +0.1%, while job creations in the US once again thwart the most optimistic forecasts.
After an episode of consolidation without intensity this morning, the CAC40 has returned to equilibrium but remains behind the other European markets which are opting more frankly for the rise with +0.5% on the E-Stoxx50 (at 4,300) and the DAX40 (+0.6% to 15,660).
A kind of phenomenon of transatlantic communicating vessels (cash flow) has eclipsed any other consideration of a micro or macroeconomic order (all economic logic is rolled), for 4 months, inexorably and in total contradiction with a level of risk-free rates ( significantly higher than that of equities), which tends towards 4% in Europe and 5.50% in the United States.
The US indices reacted negatively yesterday to the statements of the President of the Fed who reaffirmed the day before the ‘hawkish’ attitude of the institution: he reiterated these remarks this Wednesday before the US Séant.
During his hearing by the Senate Banking Commission, Jerome Powell confirmed that rates will go higher than expected at the start of the year and will be maintained at a high level for a fairly long period in order to counter inflation.
According to the CME’s FedWatch Barometer, bets on a 50 basis point hike are now in the clear majority, winning 73.5% of the vote compared to 31.4% before Powell’s speech.
The latest economic indicators have in fact revealed a greater than expected persistence of inflationary pressures, but also a robust labor market, with an unemployment rate at its lowest since 1969, and good resilience of household consumption.
In this regard, the private sector in the United States created more jobs (20% more) than expected in February, according to the monthly survey by the ADP firm.
ADP lists 242,000 job creations last month while economists polled by Reuters predicted an average of 200,000.
The firm also revised upwards its January estimates, which now show 119,000 jobs created, against 106,000 initially.
Thomas Barkin, member of the FED and president of the antenna of Richmond declared – even before the ADP survey was published – that ‘the labor market in the United States is proving to be incredibly resilient’.
Also note the widening of the US trade deficit to -$68.3 billion in January.
In the Euro zone, the ‘CVS’ GDP for the 4th quarter (seasonally adjusted) remained stable but fell by 0.1% in the EU compared to the previous quarter, according to an estimate published by Eurostat, the statistical office of the European Union.
During the third quarter of 2022, GDP had increased by 0.4%, both in the euro zone and in the EU.
Compared with the same quarter of the previous year, seasonally adjusted GDP increased by 1.8% in the euro area and by 1.7% in the EU in the fourth quarter of 2022, after +2.4% in the euro zone and +2.6% in the EU in the third quarter of 2022.
Production of goods made in Germany rose 3.5% seasonally adjusted, after falling 2.4% (revised from -3.1% in preliminary data) in December, figures show. from the Federal Statistical Office.
The speakers will follow this afternoon a new intervention by the President of the Fed, this time scheduled before the Financial Services Committee of the House of Representatives.
In the forex market, the traders’ reaction to Powell’s comments turned out to be quite dramatic, with the dollar surging against the euro and falling back to 1.0535.
On the interest rate side, sovereign bond yields eased a little after the sharp jolts known at the start of the week: our OATs erased -7.3Pts to 3.1200%, the Bunds -7Pts to 2.625% (but the ‘1 year ‘ displays 3.367% and the ‘2 years’ peaks at 3.35%), Italian BTPs -12Pts at 4.417%.
The yield of ten-year Treasuries eased by -5Pts around 3.925%, while the ‘2-year’ remains unchanged at 5.01% and the ‘6-month’ peaks at 5.27% (while the ’30-year’ is at 3.853%): we are seeing the most radical yield curve inversion in 40 years.
On the stock side, Thales announced adjusted net income, Group share up +14% to €1,556 million compared to 2021. Consolidated net income, Group share amounted to €1,121 million, up by +3% compared to 2021.
Casino announces that it has initiated the study of a new project to sell part of its stake in Assaí for an amount of approximately 600 million dollars which could, if necessary, be increased depending on market conditions.
Net income, Eurazeo share (+4.8%) stands at €595 million in 2022 compared to €1,525 million in 2021. Management confirms the trajectory of doubling its assets under management, which could reach €60 billion in 5 years, as well as an increase in the FRE margin in the medium term to 35-40%.
Euroapi’s disappointing results earned it a -22% plunge and a retracement of its IPO price a year ago, towards 12.42E.
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