The control room of Euronext, the company that manages the Paris Stock Exchange (AFP / ERIC PIERMONT)
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 29.71 points to 7,371.64 points. Over the week, however, the CAC 40 fell by 1.25%.
“The markets were convinced that the Federal Reserve (Fed) would lower its rates six times, or more, in 2024”, but central bankers “took advantage of this week to moderate these expectations as much as possible”, comments Florian Ielpo, economist from Lombard Odier AM.
Members of the American and European central banks have multiplied their declarations rejecting the idea of a drop in interest rates as rapid and significant as expected by the markets, while a large part of investors are forecasting an initial drop in interest rates. the Fed in March.
If “oil prices, which influence the evolution of inflation, are lower” than anticipated, recent macroeconomic publications underline that economic activity still remains resilient, explains Valérie Rizk, economist at Hugau Gestion.
Several macroeconomic signals show 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 at 78.8 points in January, or 13% more than in December, while analysts expected a slight decline.
One certainty remains, however: “The question is no longer if, but when, key rates will fall,” summarizes Valérie Rizk.
The President of the European Central Bank (ECB), Christine Lagarde, on Wednesday judged a reduction in rates this summer “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 company’s acquisition. Luxembourg-based Majorel, specializing 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 near term,” however, Stifel analysts do not rule out “the possibility of shares more than doubling in three years “, according to a note.
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