The Cac 40 and Wall Street without direction, TotalEnergies supported by the rise in oil prices

The Paris Stock Exchange is struggling to extend its rebound of the last two sessions and Wall Street is moving towards a hesitant opening after its good performance last week. The solidity of the labor market in the United States for the moment rules out the specter of a recession, but the high number of job creations places the Federal Reserve in a delicate position. Oil stocks are surrounded after Saudi Arabia’s decision to reduce production, while the luxury sector suffers from profit taking.

Around 2:30 p.m., the Cac 40 is stable at 7,263.57 points (-0.10%) in a business volume of 750 million euros. The contracts future on American indices oscillate around equilibrium.

A barrel of Brent from the North Sea rose 2.2% to $77.83 after gaining nearly 4%. Saudi Arabia plans to unilaterally limit production by around 1 million barrels per day starting in July, which would be its biggest cut in several years in order to boost prices. For its part, OPEC+ has decided to continue to limit the supply of the expanded cartel until 2024. TotalEnergies gains 1.4% and Vallourec 1.9%. Conversely, LVMH, Kering And Hermes fell around 1% after their rebound on Friday. Defensive sectors like telecoms are progressing. Orange thus increases by 1.8%.

On Wall Street, Exxon Mobile And Chevron earn more than 1% in pre-market trading, and Schlumberger around 3%. Apple advances 0.9%, thus flirting with its record of January 3, 2022. The Apple brand is expected to present its mixed reality AR/VR headset this Monday at the World Developers Conference. An accessory that would mark the group’s entry into the Metaverse market.

Bank of America And Citigroup evolve in dispersed order following an article in the Wall Street Journal according to which regulatory authorities are preparing a tightening of capital rules for large American banks, which could be increased by 20%.

Also to be followed this afternoon is the ISM non-manufacturing index for May in the United States, as well as durable goods orders for April and industrial orders for the same month.

Investors are wondering about the future of the progression observed on Wall Street this year, which is mainly based on a handful of technology heavyweights. “ The question is whether the magnitude of this rise can widen, which could add further impetus to what appears to be a very narrow rally. », Comments Yung-Yu Ma, chief strategist at BMO cited by CNBC.

Inflation, a determining factor for the Fed

The labor market remains solid in the United States with the creation of 339,000 jobs in May, while wage growth slowed slightly to 4.3% year-on-year and the unemployment rate increased by 0.3 points to 3.7% of the active population. These figures reinforce the feeling that the Federal Reserve should opt for a pause in its cycle of interest rate increases, before a probable tightening in July. The market estimates a 76% probability that the Fed funds rate will remain in a range of 5%-5.25% on June 14, according to the CME Group’s FedWatch tool.

Consumer price figures, to be released the day before the Fed’s monetary decision, could well be the main factor likely to tip expectations towards tightening if inflation is highnotes Jim Reid of Deutsche Bank. However, this seems unlikely before the publication of the CPI, as nothing will be 100% decided by then. We are therefore back to a certain uncertainty about the Fed’s strategy in the short term “, he specifies.

Michael Hewson, of CMC Markets, goes in the same direction, estimating that he “ would be easier to raise rates in June and keep options open for July. Communication would undoubtedly be easier, however, the differences within the FOMC already show that different opinions are starting to emerge going forward. “. The Fed entered a blackout period, preventing its members from speaking publicly until the announcement of its monetary decision.

The question of a break does not seem to arise for the ECB, whose president Christine Lagarde is due to speak this afternoon before the Financial and Banking Affairs Committee of the European Parliament. This morning, Governing Council member Boris Vujcic told Bloomberg that inflation in the euro zone is only gradually falling and that the likelihood of a reacceleration of price rises is greater than that of a decline faster. For him, ” disinflation is expected to be gradual, with risks still tilted to the upside given tensions in the labor market and underlying price pressures in the services sector “.

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