After having experienced a very heckled start to the year, the Paris Bourse fell back, while Wall Street did the same in the first half hour. Investors are limiting the risks to two days of the release of US inflation figures, which could bolster the Fed’s rate hike expectations. This pushes bond yields upward and weighs on technology stocks or those highly valued. ” There is still a lot of aggression [monétaire] to be included in asset prices and this could cause sales on the markets this week, and more particularly on growth stocks which should feel the effects of higher rates, compared to value », Warns Ipek Ozkardeskaya, senior analyst at Swissquote.
The good European statistics of the day have little impact on the trend. The unemployment rate slowed down to 7.2% in November in the euro zone, as expected, after 7.3% in October. However, companies report that the labor shortage is weighing on production. The Sentix index of investor confidence recorded a surprise improvement to 14.9 points in January after 13.5 in December (13 expected).
Around 4 p.m., the Cac 40 yields 1.06% to 7,143.20 points in a business volume of 2 billion euros. In New York, the Dow jones loses 1.03% and the Nasdaq Composite 1.9%. The latter lost 4.5% in the first week of the year.
Towards an inflation rate of 7%?
The S&P 500 and the Nasdaq Composite showed their fourth consecutive decline on Friday, weighed down by job creations half as many as expected in December. At the same time, the sharper-than-expected drop in the unemployment rate and the continued rise in the average hourly wage underscore the need for the labor market to continue to suffer from a labor shortage. .
Analysts expect inflation to continue rising in December across the Atlantic. It hit a nearly forty-year high of 6.8% in November and the consensus formed by Bloomberg anticipates a further surge to 7%. In the “minutes” of its last meeting, the Fed warned that it could raise interest rates ” earlier or at a faster rate »Than initially planned before tackling the reduction of its balance sheet. Three rate hikes could occur in 2022, according to projections released in December.
Goldman Sachs expects the Fed’s monetary policy normalization to accelerate with four tightening this year. ” We continue to anticipate rate hikes in March, June and September, and now expect another in December, for a total of four in 2022 », Wrote Jan Hatzius, strategist of the bank in a note. He further estimates that the Fed should begin the process of reducing its balance sheet, which reached $ 8.8 trillion in December, from July, if not earlier. For now, the market estimates the probability of four rate hikes this year at 50%. Investors could also have a new light on the Fed’s strategy with the hearing on Tuesday of Jerome Powell by the Senate Banking Committee as part of his appointment to a second term at the head of the central bank. That of Lael Brainard, for the post of vice-president, will follow Thursday.
Atos misses its targets for 2021
The yield on the US 10-year bond is stretched to 1.7985% after touching 1.8064%, its highest level since January 2020. It was 1.51% at the end of 2021. In negative territory for almost three years, that of the German Bund of the same maturity reached -0.025%, its highest since May 2019, before falling back to around -0.031%. In question, the new surge in inflation, both across the Rhine and in the euro zone, where it reached a record of 5% over one year in December, leading some to believe that the ECB will have no other choice than to raise rates despite denials by the central bank.
Technology stocks, which have benefited from a low interest rate environment over the past two years, are the most affected. At European level, the associated Stoxx 600 shows the largest sectoral decline (-2.9%). STMicroelectronics, Worldline and Teleperformance yield between 3.7% and 4.1%.
Atos fall by nearly 18% after having once again missed its 2021 objectives. 2.4% at constant exchange rates when the group said it expected stable revenues. In addition, the operating margin stood at around 4% in 2021, against a target of around 6%.
Conversely, the values linked to tourism remain surrounded. ADP takes 1.2%, Air France-KLM 1.9% and Accor 1.1%. The aeronautics sector also stands out with, in particular Thales, up 2%.
Hermes fell 3.4% as UBS lowered its recommendation on the title of luxury saddler from “buy” to “neutral”.
Among other analysts’ notes, Jefferies degraded Eurofins Scientific (-4.6%) from “buy” to “keep”, while Citi moved to “sell” on Schneider Electric (-3.1%).
Biggest increase in the Cac 40, Orange rises by 2.35%. Christel Heydemann, administrator of the group and boss of Schneider in Europe, could be the favorite among the candidates to succeed Stéphane Richard at the head of the French telecoms operator, reports the daily The echoes. The Minister of the Economy, Bruno Le Maire, would be particularly inclined to defend the candidacy of Christel Heydemann and would have informed the President of the Republic, writes the newspaper.
Finally Ubisoft 4.6% advance. US mobile game publisher Zynga has agreed to be acquired by Take Two Interactive at a price of $ 9.86 per share, for a total valuation of $ 12.7 billion. Zynga jumps 46.6% in New York.