The Paris Stock Exchange regains its colors at the opening thanks to cheap purchases after the three major New York indices have significantly reduced their losses at the close. In addition, the resistance of the Nasdaq surprised more than one, and this turnaround in the midst of the debate on the change of perspective of the US Federal Reserve could reflect a less strained approach to inflation. The market is awaiting comments from Jerome Powell on this point in the hope of getting some insight into the timing of the Fed’s rate hikes.
At 9:15 am, the Cac 40 gains 1.14% to 7,196.81 points.
In New York, the Dow Jones and the S&P 500 ended slightly lower yesterday, while the Nasdaq Composite managed to scavenge 0.05% after losing more than 2% during the session. Markets are focused on the US consumer price statistic, which will be released on Wednesday, as inflation has surged in recent months on both sides of the Atlantic, increasing pressure on central banks .
Does the Fed have an interest in sowing chaos?
From two to three rate hikes expected until recently, the market is now targeting four Fed monetary tightening this year, as well as implementing the process of reducing its balance sheet in the second half of the year. Some observers believe, however, that several transient factors such as tensions on supply chains and disruptions related to the Omicron variant should subside, which could give central banks more leeway.
” The question is, does the Fed have any interest in wreaking havoc on the markets for the sole purpose of fighting inflation? The answer is no, says Ipek Ozkardeskaya, senior analyst at Swissquote. And to continue: this is why everything will depend on the indicators and in view of the recent ‘hawkish’ reversal of the market, it is possible that we will see a calming of this positioning, which could lead to a favorable correction to the recent selloff on equities “.
Techs and luxury in sight
In remarks sent to senators ahead of his Senate hearing this afternoon, Jerome Powell says the Federal Reserve will do everything to prevent inflation from taking hold. He adds that the nature of post-pandemic growth may be different from previous periods of expansion. ” The pursuit of our objectives will have to take this difference into account. “, did he declare. Senators are expected to confirm Jerome Powell’s reappointment for a second term at the head of the Fed, and they will be sure to question him about the price pressures and the timing of the rate hikes.
Biggest increase in the Cac 40, Capgemini increased by 3%. Jefferies took over the cover of the SSII with “purchase” to target 270 euros. Other technology stocks are also picking up colors in the wake of the Nasdaq. STMicroelectronics gain 2.4%, Dassault Systèmes 2.6% and Teleperformance 1.6%.
Among other growth stocks, the luxury sector is also surrounded. LMH gained 1.7% while RBC raised its price target from 785 to 820 euros. Kering takes 2% and Hermes 2.3%.
Aperam gains 4.2%. Deutsche Bank has resumed monitoring the “buy” stocks with a target price of 67 euros.
Finally, Technip Energies wins 4.9%. The group has announced that it will buy back 1.8 million of its own shares from TechnipFMC, which reported the sale of 9 million shares for 118.4 million euros.