As yesterday, the slight easing of rates on the debt market allowed the Paris Bourse to end up. The Cac 40 added 0.75% to its rebound on Wednesday, to finish at more than 7,200 points for the first time this week. “The highlight of the last 24 hours has been the hearing of the president [de la Fed] Powell before the Senate Banking Committee ”, recalls Jim Reid, strategist at Deutsche Bank. “The ‘falcon’ orientation has not changed”Jerome Powell has not said anything to suggest that the US central bank will be even more aggressive in its rate hikes this year than what the minutes of the last monetary policy meeting already showed last week. He even reassured those who feared a sudden and hasty end to asset purchases. “He made it clear that quantitative easing (yes, it still exists) would end in March, despite recent speculation. And in line with consensus, he painted a picture that makes balance sheet reduction likely to start in 2022. Finally, he stressed that if the Fed were to pull out of extreme levels of accommodation, it did not need to back down. precipitate. “
Fed chairman “Delivered a performance worthy of Goldilocks Et Les Trois Ours”, wrote Jeffrey Halley, senior market analyst at Oanda, in a note this morning. ” Jerome Powell has indicated that the Fed may raise rates to contain inflation, which it plans to quickly begin the process of reducing its balance sheet, but he also announced that inflationary pressures are expected to peak in the middle of year. “
After this reassuring speech, the Paris Bourse was not shaken by the acceleration of inflation in the United States where, last month, consumer prices rose by 7% over one year, a pace unpublished since 1982, but in line with economists’ forecasts. Excluding volatile items such as food and energy, the increase was 5.5%.
In New York, the Dow Jones, the S&P 500 and the Nasdaq Composite are trending up slightly as the European stock markets close.
Strategists believe that the US and European markets will be able to withstand a higher cost of credit provided economic growth supports corporate results and inflation peaks. “If bond yields tighten and earnings decline, equities should suffer this year, says Luca Paolini, chief strategist at Pictet Asset Management. But the fourth quarter earnings season could also be a catalyst for the next rebound ”, he says.
The yield on the US 10-year bond eased to 1.73% today, against 1.78% at the close and more than 1.8% in session on Monday, the highest for two years.
The Fed will publish, at 8 pm, its Beige Book, a document which takes stock of the evolution of the economy over the past six weeks. It will also serve as a working document for the Monetary Policy Committee meeting on January 25-26.
The rains in Brazil benefit ArcelorMittal
ArcelorMittal gained 6.5% on the Cac 40, in the wake of the rise in iron ore prices while torrential rains in Brazil interrupted production at the country’s mines, and in particular those of the world number two Vale.
TotalEnergies ends on an increase of 3%. The price of a barrel of Brent from the North Sea, at 84 dollars, returns to the levels which were in November, before the appearance of Omicron. These levels are also three-year highs.
Conversely, Renault lost 3.5%. The automaker risks collective action from owners of Renault, Nissan, Dacia and Mercedes vehicles equipped with the 1.2 TCe petrol engine and victims of breakdowns, reports AFP, citing their lawyer.
On the SRD, Rexel jumped 10% to set a new record. Bolstered by stronger-than-expected sales activity in the fourth quarter and its efforts to control costs, the electrical equipment distributor indicates that it has exceeded its objectives for the year 2021. Daily sales growth should have reached 15, 3% last year, versus a forecast of between 12% and 15%, and the Adjusted EBITDA margin is expected to stand at 6.2%, versus a forecast of 5.7%.
OVHcloud ends up with a gain of over 4%. The specialist in cloud computing services has confirmed its objectives for its financial year as at August 31, 2022, after recording a 13.9% increase to 187.2 million euros in its turnover in the first quarter.
Finally, Nexity dropped about 4.5%. Oddo BHF downgraded the property developer from “outperformance” to “neutral” in anticipation of a probable slowdown in the group’s growth this year and an increase in debt.