The Paris Stock Exchange erased its initial gains, held back by the decline in luxury stocks after their rebound the day before. The market is torn between the persistence of fears about inflation and new signs of Beijing’s desire to ease its monetary policy.
US index futures are trending higher after Wall Street’s pullback on Wednesday. The Fed’s change of tone, motivated by galloping inflation, remains a sticking point for the markets, however. Christine Lagarde tried to reassure by declaring this morning that prices should stabilize before “ gradually decrease over the year “.
Around 9:35 a.m., the Bedroom 40 lost 0.25% to 7,155.32 points in a business volume of 350 million euros.
On Wall Street, the S&P 500 closed down nearly 1% on Wednesday, while the Nasdaq Composite entered a correction phase, now down more than 10% from its November record. The yield on the 10-year US bond hit 1.9% on Wednesday, driven by Fed rate hike expectations, compared to 1.5% at the start of the year. It is hovering around 1.86% in Asia this morning.
The mood is different on the other side of the Pacific, where the main markets have ended a series of five sessions of decline in a row, driven by the rally in Chinese technology stocks. The country’s central bank surprised by lowering its prime one-year lending rate by 10 basis points to 3.7% and that of 5-year loans, which concerns long-term loans including those intended for mortgages. been reduced from 4.65% to 4.6%. For the latter, this is the first easing since 2020. The People’s Bank of China recently indicated that it will undertake new easing measures this year to revive growth.
A quarter or a half basis point?
However, the dominant theme for the markets remains the Fed’s forthcoming tightening of monetary policy and the prospect of a drying up of liquidity with the probable reduction in the size of its balance sheet towards the end of the year. ” There is little doubt that the Fed will act on rates in March, and as the meeting nears [du FOMC], speculation has run rampant this week on a 50 basis point hike when it takes action, recalls Michael Hewson, chief market analyst at CMC Markets. Corn, this seems highly unlikely given that, even now, it continues to strengthen its balance sheet. Additionally, this would be a considerable change in tone from his recent communication on the December meeting. “, he argues.
This inflation theme is also fueled by the high level of oil prices, at a seven-year high for Brent at more than 88 dollars a barrel. The market will therefore be watching at 11 a.m. for the final data on consumer prices in the euro zone in December. The increase should be confirmed at 5% over one year, a record level, after 4.9% in November.
The other indicators of the day are American: weekly jobless claims, the Philadelphia Fed index for January, sales of existing homes for December and weekly oil inventories.
Valneva leads the SRD, releases on luxury
Up more than 2% at the open, Alstom now yields 0.3%. The railway equipment manufacturer reported an 11% increase in its turnover in proforma data, in line with its forecasts for the first nine months of its 2021-2022 financial year and confirmed its annual and medium-term outlook. It also forecasts a sequential increase in sales in the second half and aims for a gradual recovery in adjusted operating income over the 2021-2022 financial year.
Valneva jumped 23.3%. The group announced that its inactivated vaccine candidate against Covid-19 showed neutralization of the Omicron variant of the coronavirus responsible for the disease. ” The results of a preliminary study conducted in the laboratory (…) demonstrate that antibodies from serum of individuals vaccinated with three doses of Valneva’s inactivated Covid-19 vaccine candidate, VLA2001, neutralized the Omicron variant “, indicates the laboratory.
Support from the Cac 40 yesterday, luxury stocks are falling again. LVMH loses 1.3%, Kering 1.2% and Hermes 1.9%.
Soitec drops by 15.7%. The group’s executive committee denounced in a letter addressed to the group’s board of directors the “rush” and “opacity” of the process which led to the appointment of Pierre Barnabé as new general manager, report The echoes and The gallery.
vinci gains 0.9%. Societe Generale has resumed monitoring the title to “purchase” to target 114.60 euros.