The Paris Bourse ended sharply lower (-1.17%) on Friday, as investors realized that the situation in the job market in the United States did not suggest any change in course in the monetary policy of the American central bank. .
The star CAC 40 index fell 69.48 points to 5,866.94 points. However, its vigorous rebound at the start of the week enabled it to post a weekly gain of 1.82%.
Stock market indices were soothed at the start of the week by renewed hopes of a less stringent monetary tightening by central banks. But several statements from US monetary officials and a strong US jobs report once again signaled to investors that it would be futile to anticipate such a less restrictive scenario too soon.
“We are still in this reverse logic, namely that good economic news is bad news for the markets”, summarizes Alexandre Neuvy, manager of Amplegest.
The labor market slowed a little in September in the United States, a desired development in the fight against inflation, but it remained solid, and the unemployment rate even returned to its pre-pandemic level .
The unemployment rate fell slightly again in September, falling to 3.5% compared to an expected 3.7%.
September job creations came out in line with expectations: the US economy created 263,000 jobs last month.
“This is not good news in terms of the outlook for lower inflation and lower interest rates, which is sanctioned by the markets”, explains the expert.
A tight job market encourages wage increases which themselves fuel inflation. A deterioration in the labor market is thus, paradoxically, desired and expected to see the rise in prices decline.
To fight inflation, the American central bank (Fed) has been raising its main key rate since March, a way of compressing economic activity by discouraging consumption and investment, at the risk, however, of causing a recession.
The next meeting of the Fed’s monetary committee is scheduled for November 1-2. By then, September inflation data will have been released.
“In the short term, every American statistic, whatever it is, will influence the markets,” predicts Mr. Neuvy.
Data from the jobs report boosted bond yields in the sovereign debt market, which mechanically penalized rate-sensitive sectors, such as technology stocks: Dassault Systemes fell 6.53%, STMicroelectronics 5 .30%, Capgemini by 4.07% and Teleperformance by 3.95%. Luxury was also struggling: LVMH lost 2.66%, Hermès 2.47% and Kering 1.43%.
pan/kd/LyS