The Paris Stock Exchange is on course for the rise on Tuesday but clearly slows the pace in the middle of the afternoon, the Cac 40 only gaining 0.84%, to 6,319.31 points. The deceleration movement began at 3 p.m., with two reports from the United States. Reading, first of all, the terms of a six-month bond issue in the United States. At 6.89%, the rate paid for April 2023 is the third highest since the introduction of these products in 1998. Above all, it suggests that the Treasury, which takes into account the evolution of consumer prices within the framework of these issues, expects high inflation to continue for many more months. At the same time, we became aware of the evolution of new job offers according to the Jolts report across the Atlantic, which show that the labor market remained very dynamic in October, with 10.7 million net offers, beyond the 10.2 million in September and above all the 9.8 million anticipated. The Labor Department figures will be released this Friday.
Wall Street, up in early trade, erased its gains. the Dow Jonesthe S&P500 and the Nasdaq Composite are now slipping by more than 0.4%. Pfizer, which rose by 3.6%, is nevertheless a support. In the third quarter, the turnover of the pharmaceutical laboratory reached 22.6 billion dollars, beyond the expectations of 21.04 billion of analysts. The annual forecast for sales related to anti-Covid vaccines is raised by $2 billion, or $34 billion, driven by strong demand for Pfizer’s new bivalent product, which acts both against the initial strain of the Sars-CoV coronavirus- 2 and against the Omicron variant.
End of restrictions in China?
The morning had been much more lenient, with a gain of 1.9% for the Cac 40 at the best of the session. The movement was led by the large capitalizations of the place and in particular by the luxury sector. LVMH, Hermes International and Kering are still gaining 2.2 to 3.2%, supported by rumors, unconfirmed and relayed by the Bloomberg agency, on social networks according to which the Chinese authorities are considering gradually ending their zero Covid policy. The CSI 300 index gained 3.6% this morning. Chinese Foreign Ministry spokesman Zhao Lijian, however, reacted by stating that he was “not not up to date » of a government committee responsible for evaluating the means of such an end to the health restrictions still in force in the country.
” I’m not surprised by this rumor circulating online about a conditional reopeningsaid Liu Xiaodong, fund manager at Shanghai Power Asset Management. The Council of State could wait for the deliberation of the team of experts to determine the next step to be taken. The market is also ready to buy on any indication that an inflection point is in sight for zero Covid policy. “.
Published this morning, the PMI manufacturing index as presented by Caixin also came out a little above expectations, at 49.2 points in October, against 48.1 in September. Commodity-related stocks, which would benefit from a recovery in the Chinese economy, are also circled. TotalEnergies advance of 2.1%, in the wake of the rise of more than 2 dollars of oil, the barrel of Brent returning beyond the 94 dollars. oil services CGG and Vallourec take 3% to 6%, while mining Eramet advance of 45%.
Everything the Fed wants to avoid
Initiatives also remain limited by the Fed’s deadline. If there is no doubt that the central bank will raise its key rates by 75 basis points, for the fourth time in a row, the intervention of Jerome Powell, its president, will be much more watched. Will he have these few “dovish” words that will be applauded by the Stock Exchange? Nothing is less sure. For Ipek Ozkardeskaya, of Swissquote, Jay could very well, again, give a slap to the “doves” after the figures of the PCE price index, the measure of inflation preferred by the Fed, presented at the very end of last week.
At 6.2% over one year, it certainly remained stable in September compared to August, which could bode well for a stabilization in the rise in prices, but in “core” data, i.e. excluding volatile elements such as energy and food, it continued to increase. At 5.1%, it remains more than twice the central bank’s 2% target. While some members of the Fed have expressed in recent weeks the possibility of slowing the pace of monetary tightening, there is a good chance that Jerome Powell will slash “dovish” hopes this week, as he did earlier. this year, concludes Ipek Ozkardeskaya. A less offensive speech would not fail to relaunch the stock market machine, as inflationist… everything the Fed wants to avoid.