The Paris Stock Exchange is trading at almost two-month lows, weighed down by the feeling that central banks will have to be more aggressive in the face of inflation that seems out of control. The April US jobs report is unlikely to change the Fed’s more aggressive approach, especially as wages have continued to rise.
According to the Bureau of Labor Statistics, the US economy added 428,000 nonfarm jobs last month, versus 380,000 expected and same as in March (revised from 431,000). The unemployment rate remained stable at 3.6% of the active population, while the average hourly wage increased by 0.3% over one month and 5.5% over one year, against +0.4% respectively and +5.5% estimated.
1/2 point hikes as transient as inflation
Shortly after 2:30 p.m., the Bedroom 40 lost 0.99% to 6,305.43 points after falling below the 6,300 threshold for the first time since March 15, in a business volume of 1.8 billion euros. The contracts future on American indices yield between 0.3% and 0.6%. On Thursday, the Nasdaq Composte fell 5%, its biggest drop since June 2020 after posting its best performance in nearly two months the day before.
The return of risk aversion thus follows a relief rally sparked by the Federal Reserve’s decision to raise its interest rates “only” by 50 basis points, while ruling out the prospect of a 75 points before September. For Jeffrey Halley, market analyst at Oanda, “ raise rates by 50 basis points at each meeting [du FOMC] while preparing to remove $95 billion a month of Treasuries and mortgage-backed bonds from its balance sheet is nothing dovish “. He adds that Jerome Powell has made room for himself to raise rates by 75 basis points if necessary. And to conclude that 50 basis point hikes could turn out as well ‘transient’ than inflation “.
JCDecaux sanctioned on its forecasts
Biggest drop in SRD, JCDecaux drop more than 11%. The 50.3% increase in turnover in the first quarter is offset by the forecast for organic growth of 15% in sales in the second, lower than analysts’ expectations due to the impact of health restrictions in China. For Berenberg, the outdoor communication group has certainly had a solid start to the year, but the outlook is weak. Societe Generale lowered its target price on the title from 17.60 to 16.90 euros while maintaining its opinion to “sell”.
Axa loses 1.2%. The insurer confirmed its objectives after recording a 1% increase to 31.3 billion euros in its turnover in the first quarter, in an uncertain geopolitical context linked to the conflict in Ukraine.
The 5% drop in the Nasdaq Composite weighs on technology and growth stocks. Capgemini plaice by 2.6%, Teleperformance by 2.5%.
The luxury sector is also under pressure as the Chinese authorities have confirmed their commitment to implementing their “zero-Covid” policy, warning those who would seek to question it. L’Oreal decrease of 2.9%, Hermes by 3% and Kering by 2%.
Conversely, Stellantis increased by 4%, analysts remaining positive on the title the day after the publication of its quarterly turnover. DZ Bank thus moved from “hold” to “buy”, while Stifel reiterated its buy recommendation.
The branch of Sanofi specialized in active pharmaceutical ingredients Euroapi increased by 5% during its first trading session.