The Paris Stock Exchange retreats in a market that remains cautious amid Omicron’s push and Atos’ fiscal 2021 earnings warning. The prospect of a US Federal Reserve rate hike in spring is the dominant theme at the start of the year, and the inflation figures in the United States will logically be the highlight of the week, with the start of the earnings season in the United States.
At 9:30 a.m., the Bedroom 40 lost 0.40% to 7,190.27 points in a business volume of 270 million euros.
Wall Street lost ground on Friday, weighed down by job creations half as many as expected in December. At the same time, the sharper-than-expected fall in the unemployment rate and the continued rise in the average hourly wage underline, if need be, that the labor market continues to suffer from a labor shortage .
US inflation still higher
Investors are now turning to the consumer price statistics in the United States, scheduled for Wednesday. Analysts expect inflation to rise further in December, which hit 6.8% in November, its highest level since 1982. In the minutes of its last meeting, the Fed warned that it could raise its interest rates faster than expected before tackling the reduction of its balance sheet. The contracts future on federal funds assess the probability of a rate hike in March at 90%, against 63% at the very end of last year.
The yield on the 10-year US bond rose to 1.8% in session on Friday before returning to around 1.7656% in Europe this morning, against 1.51% at the end of 2021. In Europe, the yield on the German Bund with the same maturity is approaching the 0% to -0.0320% threshold after the new surge in inflation, both across the Rhine and in the euro zone, where it reached a record 5% over one year, prompting some to believe that the ECB will have no choice but to raise rates despite the central bank’s denials.
Atos misses its annual targets
Also this week, the market will be watching Jerome Powell’s hearing on Tuesday by the Senate Banking Committee as part of his nomination for a second term as head of the Fed. That of Lael Brainard, for the position of vice-president, will follow on Thursday. Powell and Brainard could, on this occasion, give new information on the timing of interest rate increases by the US central bank.
Also in sight, the opening of the fourth quarter earnings season in the United States, with the banks JPMorgan Chase, Citigroup and Wells Fargo on Friday, as well as the world leader in asset management BlackRock.
Atos fall of nearly 17% after annual results below the financial objectives it presented last summer for 2021. The SSII reported a 2021 turnover of around 10.8 billion euros. euros, down around 2.4% at constant exchange rates, while the group had said it was counting on stable revenues. The operating margin stood at around 4% in 2021, against a target of around 6%.
Among other technology stocks, Capgemini loses 1.7%, STMicroelectronics 1% and Teleperformanceand 1.6%
Conversely, Kering gains 0.9%. UBS raised its recommendation on the title of the luxury group from “neutral” to “buy”. The same intermediary changed from “buy” to “neutral” on Hermeswhich lost 2.6%.
Among other analyst ratings, Jefferies downgraded Eurofins Scientific (-2.5%) from “buy” to “hold”, Citi switched to “sell” on Schneider-Electric (-1.8%) and Exane BNP Paribas is now at “underperformance” on JCDecaux (-1.3%) versus “neutral” previously.