The Paris Stock Exchange has almost erased its losses of the past three weeks and Wall Street should continue to rise, according to US index futures. 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’s hard to pinpoint exactly what has changed, maybe the results are boosting morale, or maybe it’s the soothing tone of central bankers desperately trying to guide expectations. Perhaps it is simply because investors are adapting to a tightening environment in which they feel more comfortable. asks Craig Erlam, senior analyst at Oanda.
Either way, tech stocks are benefiting. Worldline, Capgemini and STMicroelectronics posting increases of between 2.7% and 3.7%. Cyclical values also stand out. Stellantis, Renault and Valeo rose between 3.4% and 4%, while the Stoxx 600 for the automobile sector 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 banks’ Stoxx 600 posted the only drop among the 19 sector indices, with a decline, however, limited to 0.2%.
Around 2:30 p.m., the Bedroom 40 gained 1.53% to 7,136.06 points in a business volume of 1.47 billion euros. The contracts future March on American indices posted increases of 0.7% for the Dow Jones and 1.4% for the Nasdaq 100. disneya component of the Dow Jones, and Uber Technologies will release their quarterly results after the close of Wall Street.
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 3 basis points to 1.8110%. 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 due to 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.
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 their economists’ GDP growth forecasts. Furthermore, they do not believe that a more aggressive ECB will have a destabilizing effect on the outlook for equities.
The yield on the 10-year US bond eases for its part by nearly 4 basis points to 1.9253%, whereas it recently came close to 2%. The bond markets are nevertheless exposed to expectations of several monetary tightenings by the Fed this year. Investors therefore remain focused on the main meeting of the week, scheduled for tomorrow, with the consumer price statistics for January 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
Eramet advance of 5.7%. 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 4.8%. 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 1.1%. 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 2.8%.