The Paris Stock Exchange closed down 0.40% on Friday, with the market coming to terms with the idea that rate cuts from the European and American central banks could take place later than expected.
The flagship CAC 40 index fell by 29.71 points to 7,371.64 points. Over the week, however, the CAC 40 fell by 1.25%.
Markets were convinced that the Federal Reserve (Fed) would lower its rates six times or more in 2024, but central bankers took advantage this week to moderate these expectations as much as possible, comments Florian Ielpo, economist at Lombard Odier AM.
Members of the American and European central banks have made numerous declarations rejecting the idea of a reduction in interest rates as rapid and significant as expected by the markets, while a good part of investors are forecasting a first reduction in interest rates. the Fed in March.
If oil prices, which influence the evolution of inflation, are lower than expected, recent macroeconomic publications underline that economic activity still remains resilient, explains Valrie Rizk, economist at Hugau Gestion.
Several macroeconomic signals have shown so far that American demand is far too solid and that inflation is not yet under control for a rate cut to be decided.
American inflation was higher than expected in December, retail sales surprised by their good performance, applications for unemployment benefits fell to the lowest level in more than a year, and, on Friday, the The University of Michigan’s consumer confidence index surprised by the optimism it showed.
In detail, the barometer climbed to its highest since July 2021 to 78.8 points in January, or 13% more than in December, while analysts expected a slight decline.
However, one certainty remains: The question is no longer if, but when, key rates will fall, summarizes Valrie Rizk.
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The President of the European Central Bank (ECB), Christine Lagarde, judged on Wednesday that a reduction in rates this summer was likely, while recalling that certain indicators are not anchored at the level where we would like to see them.
Teleperformance at the top of the CAC
Teleperformance jumped 8.61% to 143.25 euros, ranking at the top of the Parisian CAC 40 index, thanks to an improvement in Stifel’s recommendation on the stock, in the wake of the acquisition of the Luxembourg company Majorel , specializes in customer experience and business process outsourcing services.
We recognize that it may be too early to tell and that shares could be volatile in the short term, however, Stifel analysts are not ruling out the possibility of shares more than doubling in three years, according to a note .