Investors hope that the United States Federal Reserve (Fed) will stop raising its key rates in the coming months.
The Paris Stock Exchange hit a new session record on Monday, driven by the idea that the US central bank could soon stop its rate hikes. Around 10:05 a.m., the flagship CAC 40 index gained 0.64% or 46.97 points to 7,395.09 points. Earlier, it broke the 7400 mark for the first time in its history and reached 7401.15 points, surpassing its previous record (7387.29 points) from February 16. On Friday the Parisian rating had gained 0.88%, posting a weekly increase of 2.24%.
Despite higher-than-expected inflation figures and a solid job market in the United States, investors are hoping that the Federal Reserve (Fed) will stop raising its key rates in the coming months after statements Thursday from a senior official of the institution. On the bond market, European government bond rates eased markedly, while remaining at a particularly high level. The French 10-year borrowing rate fell to 3.14% around 9:55 a.m. against 3.19% at the close on Friday.
The fact that the economy is resisting the rate hikes made in recent months is both good news for growth prospects and worrying because it could rekindle inflationary pressures. Xavier Chapard, of La Banque Postale AM notes that “Purchasing Managers’ Indicators (PMI) rise again in February and indicate that global activity is returning to growth for the first time since last summer“, reassuring statistics that suggest “that the improvement in the global economy observed in January continues in February“. But on the other hand “companies continue to indicate strong price increases“, Above all “in services“, he adds.
Investors will pay close attention this week to hearings on Tuesday and Wednesday for US central bank chairman Jerome Powell before the US Senate and House of Representatives. His comments and monetary policy intentions will be scrutinized ahead of the next US Federal Reserve (Fed) monetary policy committee meeting, scheduled for March 21-22. New statistics for the US job market will be released on Friday.
China’s economic reopening
On the European side, the chief economist of the European Central Bank (ECB) will deliver a speech on monetary policy on Monday. China’s economic reopening has lifted stock indices in recent months and lifted investor sentiment last week after positive data. Again on Monday, luxury stocks, very sensitive to this market, pulled the CAC up, starting with LVMH, the best increase in the index (+1.75%).
However, China on Sunday unveiled a growth target ofabout 5%“for 2023, slightly”less ambitious than the +over 5%+ or +between 5% and 5.5%+ discussed by some investors“recalls Stephen Innes, analyst at SPI Asset Management. The Chinese authoritieswish to balance economic development with financial stability and national security“, what “suggests China’s knock-on effect on global growth and inflation is going to be quite limited“, believes Xavier Chapard.
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The collective catering group Elior announced on Monday that it had signed the protocol for the acquisition of the multiservices division “DMSof the Derichebourg recycling group, its main shareholder. The Elior title climbed 7.23% to 3.77 euros.
Orpea on track
The private group of retirement homes Orpea (+ 1.66% to 2.52 euros) announced Monday that “its main banking partners“converged”on the principles of the agreementto its financial restructuring and therefore indicates the continuation of the schedule.
TO HAVE ALSO – Orpea will come under the control of the Caisse des dépôts