The control room of Euronext, the company that manages the Paris Stock Exchange (AFP/Archives/ERIC PIERMONT)
The Paris Stock Exchange closed down (-0.63%) on Friday after the announcement of better than expected US employment figures, which revived investors’ fears about the Fed’s monetary policy.
The star CAC 40 index lost 41.04 points, ending the week at 6,472.35 points, up from the start of the week.
Paris was the only European market in the red since the start of the session, weighed down in particular by luxury penalized by geopolitical tensions between China and the United States and disappointing Chinese economic indicators this week.
The job market rose sharply in July in the United States, reflecting the unexpected dynamism of the economy which risks, in the eyes of the markets, confirming the American central bank (Fed) in its policy of raising its key rates to fight inflation.
“The markets were lulled by the idea that the Fed was going to relax its policy of raising its key rates,” recalls Alexandre Baradez, analyst at IG France.
“This report takes fears of recession away but puts fears of monetary tightening” back to the fore, he said.
The bond market reacted strongly to these announcements. The two-year yields on government debt particularly increased and that of France ended at 0.36%, against 0.28% at the close of the previous day.
In France, the number of salaried jobs in the private sector continued to increase in the second quarter of 2022, despite the war in Ukraine and soaring energy costs.
According to INSEE’s provisional estimate published on Friday, the private sector recorded 102,500 net job creations between the end of March and the end of June 2022. This increase of 0.5% is higher than that of the first quarter of 2022 (+0, 3%, or 69,500 more jobs).
The French trade deficit in goods further deteriorated sharply in June and in the first half, mainly due to the energy bill.
The half-year balance sheet peaks at 71 billion euros in deficit after a deterioration of 13.3 billion euros in June, French customs announced on Friday, two historic records.
Tech suffers from rising interest rates
Tech stocks, which are particularly sensitive to changes in interest rates, fell sharply. Teleperformance, a specialist in outsourced customer service, suffered the biggest drop in the CAC 40, losing 6.25% to 308.90 euros per share. The computer giant Capgemini dropped 1.21% to 188.35 euros and Worldline (company expert in online payments) 1.26% (42.46 euros).
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In the wake of its major British competitor WPP, which lost 6.63% after announcing a small increase in net profit but lower margins in the first half, the advertising juggernaut Publicis fell 3.84% to 49.12 euros. the action, followed by JCDecaux (-2.10% to 15.37 euros).
Luxury scratched by China
French luxury, a heavyweight within the CAC 40, has suffered from the macroeconomic context in China, a country which represents a significant part of its market.
Hermès lost 2.53% to 1,348 euros per share, Kering 2.30% to 543.60 euros, L’Oréal 2.24% to 358.15 euros and the giant LVMH 1.56% to 682.20 euros the action.
© 2022 AFP
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