After three weeks of declines, the Paris Stock Exchange is trying to rebound for its last session in January, which for the time being promises to be the worst month since September with a drop of around 2%. The trend is supported by the bullish reversal on Wall Street thanks to the strong performance of the “techs” on Friday. The market remains nonetheless on its guard in the face of geopolitical tensions in Ukraine, the prospect of monetary tightening in the United States and the approach of the conclusions of the ECB and the Bank of England this week.
Shortly before 10 a.m., the Bedroom 40 gained 1.08% to 7,049.79 points in a business volume of 485 million euros.
On Friday, the S&P 500 closed with a gain of 2.4%, while the Nasdaq Composite gained 3.1%; its best performance since March. The former gained 0.8% last week, while the latter managed to erase its weekly loss. According to data from Bespoke, the S&P 500 has seen a range change of at least 2.25% over the past five sessions. Either way, the managers’ benchmark is now 8% below its all-time high and the Nasdaq 15% below its all-time November high.
Rate hikes at every FOMC?
The market has priced in four Fed rate hikes this year, but many observers believe market participants have yet to appreciate the risk of a faster and deeper tightening than expected. Goldman Sachs now expects five quarter-point rate hikes this year, up from four previously, while BofA expects quarter-point hikes at every FOMC meeting this year from March.
Atlanta Fed President Raphael Bostic told the FinancialTimes than ” all options are on the table at every meeting “. He does not rule out the possibility of a rate hike at each of the seven remaining meetings this year, nor a tightening of half a point, which had not happened for about 20 years. Rapahel Bostic also says he is in favor of reducing the size of the Fed’s balance sheet by $9 trillion. the earlier » possible and says to himself « optimistic on the outlook for the US economy despite high inflation.
Early corporate results were mixed to say the least with disappointments from banks and some tech like Netflix, while Microsoft and Apple demonstrated their strength. The market will be watching quarterly releases from Alphabet (Google), Amazon and Meta (Facebook) this week. In France, four Cac 40 companies will be on deck: Dassault Systèmes, Publicis, Sanofi and Vinci.
Also to follow this week, the monetary meetings of the Bank of England and the ECB. The first could decide to raise its interest rates again, while the second should stick to its optimistic rhetoric on a gradual reduction in inflation this year. Unless new dissensions appear within its board of governors. The January US jobs report will wrap up the week. Three indicators are on Monday’s agenda, the GDP of the euro zone in the fourth quarter, the first estimate of inflation in Germany in January and the Chicago PMI MNI index for the same month.
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Orpea picks up 0.5% after falling more than 48% last week. The board of directors of the group, questioned in a book on the management of nursing homes in France, announced on Sunday the dismissal of its general manager, Yves Le Masne, and the appointment of a new CEO, Philippe Charrier.
Casino gives up 8.7%. The group indicated that it had lowered its estimate of gross operating surplus (EBITDA) for its retail brands in France in 2021 and now anticipates a decline in this indicator, after a fourth quarter that was more difficult than expected. In its wake, crossroads down 4%.
Biggest increase in the Cac 40, ArcelorMittal wins 3.9% despite the decline in contracts future on iron ore. Societe Generale favors the sectors most exposed to investments by companies and States, such as industrial stocks and those linked to materials, located upstream of the supply chain.
Worldline and STMicroelectronics gained around 2.5% in the wake of the Nasdaq’s advance on Friday.
Edenred appreciated by 1.6% and Arkema 1.8%. Berenberg raised its recommendation on the title of the specialist in payment titles from “sell” to “hold”. The broker has also moved from “sell” to “hold” on Arkema, which takes 1.7%.
Finally, note that the actions Faurecia are suspended from trading pending a press release on the acquisition of Helia.