The Paris Stock Exchange is clearly in the green this Thursday, the Cac 40 progressing by just over 1% in the middle of the afternoon, to 6,373.56 points, in the wake of a continued rebound on Wall Street after Fed minutes with no nasty surprises the day before. At the start of the session, the Dow Jonesthe S&P500 and the Nasdaq Composite gain from 0.6% to 0.8%. But trading volumes are low in Paris on this holiday, barely exceeding one billion euros.
The trend is also benefiting from the hope of further support measures from Beijing. This morning, Chinese Premier Li Keqiang said the country’s economy was at a ” critical moment “in the face of difficulties” even more important than in 2020 “, before indicating:” We need to seize this window of opportunity to get the economy back on track “. And the Chinese authorities will try to ensure the economy grows in the second quarter also said Li Keqiang. The return to work rates, which have fallen to 30% in some provinces, must in particular be quickly increased to 80%.
In Paris, Kering, Hermes International and LVMH, very sensitive to changes in growth and consumption in Asia, rose by 1.6% to 2.6%. The automotive sector is also one of the big winners of the day, in particular the equipment manufacturers, like Faurecia (+5.8%) and Valeo (+5.1%). The used car dealer Aramis Group climbed more than 8%, leading the SRD.
The Fed will soon be “data dependent”
Yesterday, the minutes made it possible to recall that the members unanimously voted for a 50 basis point increase in fed funds announced on May 4, in the range of 0.75% to 1%. They further agreed that the US economy was very strong, the labor market was extremely tight and inflation was very high. What confirms the scenario according to which the central bank will raise again, during its next two meetings in June and July, its key rates by another 50 basis points.
For Paul Ashworth, of Capital Economics, these two rate hikes will then give way to tightenings of 25 basis points during the last three sessions of the year. ” We believe that after the July meeting, the Fed will be watching more macro data for rate hikes to follow, which means that the policy trajectory after July will depend on that of inflation and progress in resolving imbalances between labor market supply and demand says Bob Miller, bond strategist at BlackRock.
6% of Vallourec’s capital invested at 12.20 euros
In the meantime, signs that the US economy is weakening are already noticeable. Of the last 19 major economic indicators, 13 have missed economists’ expectations, Nomura noted this morning. The question is therefore whether this will lead the Fed to take a break – which the stock markets are hoping for – or whether it will strengthen the central bank’s resolve.
It is in this context that the statistics of the day were closely followed. The annualized first-quarter GDP contraction was revised to 1.5% in a new estimate, from 1.4% previously and 1.3% expected by the consensus, while pending home sales fell more by 11% in April (which reinforces, by the way, Numura’s figures). The weekly jobless claims, they came out at 210,000, not far from the 215,000 anticipated.
No company publication to report in France. We note, however, the drop of almost 7% in Vallourecthe manufacturer of seamless tubes subject to a placement of 13.7 million shares by investment funds at a price of 12.20 euros, i.e. a discount of 12.5% compared to the share price Wednesday closing.