The specter of a rebound without follow-up is coming back to haunt the Paris Stock Exchange, where investors are nervous at the end of a week dominated by the feeling that the economic slowdown could encourage central banks to reduce the extent of their monetary tightening. The good health of the American job market seems to lend even less credence to this thesis in that it undermines fears of recession.
The US economy created 372,000 jobs in June after 384,000 (revised from 390,000) the previous month, according to figures published by the Bureau of Labor Statistics (BLS), against 265,000 anticipated by the consensus formed by Bloomberg. The unemployment rate remained stable at 3.6% as expected, while average hourly wage growth slowed to 5.1% year on year, after 5.3% in May (+5% expected).
Shortly after 4 p.m., the Cac 40 is almost stable at 6,002.47 points (-0.06%) after a low of 5,952.89 (-0.89%) and a peak at 6,053.17 (+0.77). %), in a business volume of 1.6 billion euros. In New York, the Dow Jones yields 0.26% and the Nasdaq Composite 0.49%. the S&P500 has so far lined up four consecutive bull sessions this week, the longest streak since the end of March.
An increase of 75 basis points endorsed?
For Andrew Hunter, Senior US Economist at Capital Economics, the US jobs report could be enough to bolster the prospect of another 75 basis point rate hike at the Fed’s end-of-month meeting, even if signs of slowing wage growth and the recent fall in prices commodity prices suggest the inflation outlook may improve faster than officials expected [de la Fed] “.
Fed Governor Christopher Waller also estimated on Thursday that the Fed could tighten its rates by 75 basis points in July to curb inflation, then by 50 basis points in September, while judging that fears of recession were ” exaggerated “. James Bullard, head of the St. Louis antenna, believes for his part that there is a good chance of seeing a ” economic soft landing American.
The euro-dollar a hair’s breadth from parity
On the foreign exchange market, the euro is getting a little closer to parity with the greenback after touching 1.0076 dollars. The single currency is suffering from the economic slowdown in Europe, directly exposed to the war in Ukraine and the surge in the prices of energy and agricultural raw materials, and from the much more aggressive approach of the Fed to control inflation. The latter has raised the Fed Funds rate by 150 basis points since March, while the ECB is preparing to raise its key rates by 25 basis points at the end of July, for the first time since 2011.
Uncertainty about the impact of China’s zero Covid policy on the global economy is weighing on metal prices. The Stoxx 600 index of basic resources shows the largest sectoral decline in Europe with a decline of 1.1% after a gain of 5.4% the day before on the hope of new stimulus measures in China. The luxury sector (-0.6%) follows suit. ArcelorMittal loses 0.8%, Hermes 2.3% and L’Oreal 3.9%.
EDF and Ubisoft make the splits
Biggest rise in SRD, EDF takes another 6.9%. The government is studying with Goldman Sach and Société Générale the various options to raise the electrician’s capital to 100%, reports the FinancialTimes citing sources familiar with the matter. A minority buyout offer seems to be the preferred track, adds the daily.
Rexel gains 4%, whileUbisoft 5.3% drop. Exane BNP Paribas raised its recommendation on the title of the distributor of electrical equipment from “neutral” to “outperformance” to target 18 euros, and downgraded the video game publisher from “outperformance” to “neutral” by lowering its target from 20 at 18 euro.
Among other analyst notes, Deutsche Bank raised its target price on Thales from 137 to 142 euros. The action of the defense electronics group appreciated by 1.4%.
Eurazeo takes 1.2%. The investment company has finalized the sale of its stake in the Orolia group to Safran as part of a transaction that will generate proceeds of 189 million euros.