The Paris Stock Exchange continues its march forward and seems, for the moment, on the way to signing its first weekly increase since January 7. Wall Street also rose, driven by technology stocks before a new wave of quarterly publications, including those of Disney, a component of the Dow Jones, and Uber Technologies, scheduled after the close. The pause in the “selloff” on government bonds brings a little serenity to markets recently shaken by the prospect of monetary tightening by central banks after several years of accommodating policies.
” It is difficult to point out precisely what has changed, perhaps it is the results that help to boost morale, or it is the more soothing tone of central bankers who are desperately trying to steer expectations. Maybe it’s just that investors are starting to adjust to a tightening environment that they feel more comfortable with. asks Craig Erlam, senior analyst at Oanda.
Around 3:35 p.m., the Bedroom 40 increased by 1.64% to 7,143.80 points in a business volume of 1.75 billion euros. In New York, the Dow Jones gains 0.69% and the Nasdaq Composite 1.34%. At Tuesday’s close, the index of major technologies had recovered more than 6% from its low point on January 27, which had led it into a correction phase.
The ECB is trying to calm things down
The yield on the 10-year German Bund, which serves as a benchmark in the euro zone, eased 4 basis points to 0.2220% after touching 0.2715% on Tuesday. It had gone back above the 0% threshold at the end of January for the first time since May 2019. That of the Italian BTP of the same maturity fell by 4 basis points to 1.7880%. However, it remains 40 basis points above its level at the start of last week.
The President of the Bundesbank, Joachim Nagel, estimated in the weekly Die Zeit that the ECB could raise rates this year if inflation remains high. For him, a late normalization of monetary policy is more risky than early action. An unsurprising statement given the traditionally conservative position of the Buba.
But other ECB officials have recently been busy calming the hawkish expectations raised by Christine Lagarde’s comments at her press conference last Thursday. The central bank chair herself tried to calm things down by saying that any tightening would be “ gradual “, while the Governor of the Bank of France, Villeroy de Galhau, estimated before the Finance Committee of the National Assembly that the reactions of the market were perhaps exaggerated.
“Techs” and the automobile in pole position
Tech stocks are taking full advantage of this lull. Worldline, Capgemini and STMicroelectronics posting increases of between 3.5% and 4%. Cyclical stocks are not left out. Stellantis, Renault and Valeo rose between 3.2% and 4%, while the associated Stoxx 600 posted the best sector performance in Europe with a gain of 3.8%. Registrations should increase by 7% to 2.8 million units across the Rhine this year, according to the Association of the German Automotive Industry (VDA). The 19 Stoxx 600 sector indices are in the green.
Beware of US inflation
Morgan Stanley strategists say analysts’ forecasts for European corporate profits are overly pessimistic as the eurozone economy recovers from the two-year shock of the pandemic. “Consensus estimates remain very moderate “, according to them. They add that expectations of 6% aggregate growth in corporate profits are lower than forecasts for GDP growth by economists at the US bank. Furthermore, they do not believe that a more aggressive ECB will have a destabilizing effect on the outlook for equities.
The yield on the US 10-year bond eased nearly 3 basis points to 1.9335% as it recently flirted with more than three-year highs. The bond markets are nevertheless exposed to expectations of several monetary tightenings by the Fed this year. The next hurdle to overcome is expected tomorrow with the January consumer price statistics in the United States. The market is preparing for an acceleration of inflation to 7.3% over one year, which would be a new high of almost 40 years, after 7% in December.
Amundi exceeds its strategic objectives
Biggest rise in SRD, Eramet advance of 6.7%. Exane BNP Paribas raised its target price on the title of the mining group from 82 to 126 euros, maintaining its opinion of “outperformance”.
Amundi increased by 5.2%. The group announced that it had already exceeded its strategic objectives for 2022, while it reported a sharp increase in annual results last year, thanks to the growth of retail and its activities in Asia. The asset manager, 70% controlled by Crédit Agricole, published adjusted net income of 328 million euros over the October-December period, up 14% over one year. Over the whole of 2021, the group’s adjusted net income increased by 37%, to 1.315 billion euros.
Airbus appreciated by 1.2%. The aircraft manufacturer said it had received 36 orders for aircraft in January 2022. The group also delivered 30 aircraft to twenty customers last month. The motorist Saffron advance of 3.3%.