CAC40: tests 7,000, W-Street hesitant after CPI compliant

( – The Paris Stock Exchange (+0.8% to 6,980) has crossed the 8% mark since January 1.
And the CAC40 even peaked at 7,016 Pts around 2:45 p.m…. after the publication of the American ‘CPI’, which came out perfectly in line with expectations.
Wall Street has been Yo-yoing since 3:30 p.m.: opening down -0.5% on average, then up +0.3% before returning to equilibrium (S&P500 at -0.2% after touching 4,000, Dow Jones at +0.2% which settles above 34,000).

But the most striking market event is the CAC40 ‘GR’ which peaked at 20,600 Pts: it was then less than 2% from its absolute historic record of 21,030 Pts on January 5, 2022.
A war (still ongoing), a coming recession, sharply rising rates, record state debt separate us from the 21,000 tested 1 year ago, when the valuation of the CAC40 was already considered dizzying with flourishing prospects for 2022/2023.

What’s been better since then?
Maybe inflation is showing the first signs of ebb… and the markets are extrapolating a bright future for 2024.

The ‘CPI’ (Overseas Price Development Report) published by the Department of Labor increased by 6.5% in December 2022 compared to the same month of 2021, an annual rate at the lowest since October 2021 and broadly in line with economists’ expectations.

Excluding energy (+7.3%) and food (+10.4%), two traditionally volatile categories, the annual inflation rate stood at 5.7% last month, an overall level in line with what the market expected.
Sequentially, i.e. between November and December 2022, consumer prices in the United States fell by 0.1% in raw data, but rose by 0.3% excluding energy and food products.

The labor market, which remains one of the indicators most closely followed by the FED, remains fascinatingly robust since registrations for unemployment benefits in the United States fell by 1,000 during the week of January 2, settling at 205,000 against 206,000 (revised from the original estimate of 204,000) the previous week, according to the Labor Department.

The ‘CPI’ seems to be a ‘non-event’ for the bond markets: the US T-Bonds even tend to deteriorate compared to this morning since the ’10-year’ shows 3.53% (against 3.556% yesterday evening and 3.455% this morning) and our OATs eased by -5Pts towards 2.626% after posting 2.54% at their lowest, i.e. -13Pts.
Movement on the FOREX with the Dollar falling to 1.0840 against the Euro but recovering a little to 1.0790 (-0.4%).

In company news, Worldline announces that it has finalized the acquisition of 40% of the capital of Online Payment Platform, a Dutch online payment service provider offering a payment solution dedicated to marketplaces and platforms in the C2C segment in particular .

TotalEnergies announces that it has started up its 18th biogas production unit in France, called BioBéarn and located in Mourenx in the Pyrénées-Atlantiques department. With a maximum capacity of 160 gigawatt-hours (GWh), it will be the largest in the country.

Orpea (-15%) announced last night that its negotiations with its creditors were continuing regarding its financial restructuring project. In a press release, the operator of retirement homes recalls that it is engaged in the negotiation of a “drastic” financial restructuring involving a capitalization of 3.8 billion euros in unsecured debt.
We would almost detect a desire to lower the title after a surge of +40%… while the company never communicated when the course collapsed.

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