The Paris Stock Exchange is looking for a trend in a sluggish market at the end of a week punctuated by contradictory speculations about a change in the Fed’s monetary policy. The publication, at 2:30 p.m., of the official employment report for September could make it possible to decide between the supporters of a more aggressive approach and those betting that the central bank could ease off. Both rely on the latest labor market indicators to defend their positions.
Mid-session, the Bedroom 40 was almost stable at 5,945.15 points (+0.15%) in an anemic business volume of barely 550 million euros. The contracts future on American indices oscillate between a gain of 0.2% for the Dow Jones and a decline of the same magnitude for the Nasdaq 100.
The consensus established by Bloomberg expects a slowdown in job creations to 255,000 last month, which would be the weakest figure since the slowdown started at the end of 2020, against 315,000 in August. ” With activity growth already much weakened and the continued impact of the Fed’s aggressive rate hikes, a further slowdown in job creation seems inevitable “said Andrew Hunter, senior economist at Capital Economics, at the end of last week.
A particularly “hawkish” campaign
The unemployment rate is expected to remain stable at 3.7% of the active population, while the average hourly wage should have increased by 0.3% over one month and 5% over one year, against 5.2%. in August, reflecting a steady slowdown since March. A continuation of this lull in wages and “ an improvement in the participation rate seems more likely than a sudden surge in the unemployment rateagrees Craig Erlam, market analyst at Oanda. Should either occur, investors could jump back on the bandwagon and restart the rally heading into the weekend. A ‘hot’ new employment statistic, however, could backfire by suggesting that the Fed still has a lot of work to do, prompting investors to err on the side of caution.” he concludes.
The Fed carried out its cultural revolution last December by confessing that inflation could no longer be described as transitory, at the same time starting its most “hawkish” campaign since the 1980s with the Fed funds rate reduced from 0-0 .25% at the end of last year to 3-3.25% in September. A paradigm shift illustrated by Loretta Mester, president of the Cleveland branch, who sees no signs advocating a slowdown in rate hikes. His colleague from Minneapolis, Neel Kaskari, for his part sees no indication that inflation has peaked. In summary, the five Fed officials who spoke yesterday insisted that the fight against inflation continues and that no change in attitude is on the horizon.
Renault at the top of the Cac 40, the techs struggling
Renault increased by 4.3%. Oddo-BHF raised its recommendation on the stock from “neutral” to “outperforming” and raised its target price from 35 to 55 euros. The broker perceives better potential linked to a “ new disruptive organization while welcoming a more “pragmatic” relationship with Nissan.
TotalEnergies rose by 1.6% while the barrel of Brent rose by more than 9% over the week, its best weekly performance since March after the decision of OPEC + to reduce its production by 2 million barrels per day.
STMicroelectronics loses 2.3% and Soitec 1.4% after Samsung Electronics announced the first decline in its profits since the end of 2019, while the American AMD presented preliminary results below expectations.
Ubisoft loose 34%. The video game publisher has announced that creative director Igor Manceau will be leaving the group at the end of November to ” personal reasons “.
Note, finally, the 7% increase in Swiss credit in Zürich. The bank plans to buy 3 billion Swiss francs of its own debt at a time when investors are questioning the financial health of the establishment.