The Paris Stock Exchange is quietly settled in the green in the middle of the day, awaiting the first exchanges on Wall Street, the agenda being very little provided in general on Monday. We simply took note, in the middle of the morning, of the Sentix index of investor confidence in the euro zone. It rebounded slightly, to -25.2 points for the month of August, against 26.4 in July and an expected deterioration to -29.1 points.
The operators know it, everything could (and even should) be played on Wednesday with the publication, in the United States, of the inflation figures for the month of July. A leading data for the Fed in the evolution of its monetary policy, while the latest employment figures, published on Friday, clearly show that inflation has entered the life of companies across the Atlantic. Last month, the average hourly wage rose more than analysts expected, so much so that it is now up 5.2% year on year, above the 4.9% consensus expectation. .
In the middle of the day, the Cac 40 rose by 0.64%, to 6,513.90 points, in an anemic trading volume of less than 500 million euros. In New York, future contracts point to a slight increase in the indices, of the order of 0.1% to 0.3%.
Pressure on the Federal Reserve
Friday, the American places ended a little groggy, the Dow Jones rising symbolically by 0.23% when the Nasdaq Composite yielded 0.50%, after the publication of very solid employment figures for the past month. The US economy is, indeed, far from being in recession. In July, the country created more than 500,000 jobs in the non-agricultural sector, twice as many as expected, for an unemployment rate down 0.1 point, to 3.5% of the active population, a plus low since the end of the 1960s. Enough to revive the hawks of the central bank, a new increase of 0.75 point in key rates is now on the table for the next FOMC meeting in September.
” It’s all about the Fed. Such a report puts pressure on the central bank to tighten rates for longer “, estimated Adam Sarhan, managing director of 50 Park Investments… and perhaps more strongly. The latest comments from members of the Fed argue, moreover, in this direction. This weekend, Michelle Bowman, of the Board of Governors, thus warned that we should expect sharp rate hikes at the institution’s next meetings, in order to curb a surge in prices which does not give no sign of appeasement. ” Similar size increases [75 points de base] should be considered until we see inflation come down consistently, significantly and sustainably “, she said.
8.7% over one year
This Wednesday, it is still expected a slight decline in inflation. In July, it should have fallen from 9.1% to 8.7% over one year. However, this would only be due to the weakening of energy prices, down 15% over the month. For the time being, and before the publication of these figures, the market is ‘pricing’ at almost 70% a forthcoming 75 basis point hike in key rates. Also to follow the next day are producer prices for the same month and the inflation component in the confidence index as calculated by the University of Michigan on Friday.
On the business side, it’s rather dead calm during this summer break. Veolia Environnement sold Suez’s UK waste business to the Australian Macquarie for 2.4 billion euros. The action gained 0.9%.
The slump in the 10-year bond yield is benefiting the few technology and growth stocks on the rating, such as Teleperformance (+2.6%), Dassault Systems (+1.5%) or Capgemini (+1%).