(News Bulletin 247) – After the publication of a confusing NFP (Non Farm Payrolls) report on Friday, the CAC 40 accelerated its rise, following the pre-opening momentum on Wall Street. The flagship tricolor index will thus have ended its first week of 2023 exactly on the weekly high points (+1.47% on Friday, +5.98% for the week).
The message sent by this NFP (Federal Monthly Employment Report) is twofold and ambivalent. Because on the one hand the market is witnessing with relief a deceleration in the rise in average hourly wages (+0.3% monthly), but the unemployment rate, expected to be stable at 3.7% of the active population, is came out sharply down to 3.5%, suggesting that the Fed has not yet gone far enough in the firmness of its monetary policy to cool the economic machine. 223,000 jobs were created in the last month of 2022, in the private sector (excluding agriculture), a figure above expectations.
Regarding wages, which in this case focused the attention of operators on Friday, “the trend is slowing and could therefore reassure members of the Fed who fear that a tight job market will fuel the cycle of increases in wages and prices” which boosts inflation, explain BNP Paribas analysts quoted by AFP.
On the stock side, Renault (+3.1%) is planning to manufacture an electric vehicle in India, Reuters reported citing sources familiar with the matter. Safran ended up 3%, supported by Bernstein, which raised its market performance recommendation to outperform on the title of the aeronautical equipment manufacturer. The luxury compartment also shone with LVMH and Hermès International, which both gained 2.8%.
On the other side of the Atlantic, the main equity indices ended Friday’s session sharply in the green, with support from the deceleration in wage increases. The Dow Jones gained 2.13% to 33,630 points and the Nasdaq Composite 2.56% to 10,569 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, rose 2.28% to 3,895 points.
A point on the other risky asset classes: around 08:00 this morning on the foreign exchange market, the single currency was trading at a level close to $1.0690. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $73.70.
To be followed as a priority on the macroeconomic agenda this Monday, the Sentix index of investor confidence in the Euro Zone at 10:30 am, the unemployment rate in the Euro Zone at 11:00 am and consumer credit across the Atlantic at 9:00 pm.
KEY GRAPHIC ELEMENTS
The flagship Parisian index recorded unprecedented highs since February 23, 2022 on Friday. This ability to close exactly on the weekly highs is interesting at this stage, and must be confirmed by volumes and the sectoral federation to consider taking into account more durable hand of the buyer camp.
FORECAST
In view of the key graphic factors that we have identified, our opinion is neutral on the CAC 40 index in the short term.
We will take care to note that a crossing of 6898.00 points would revive the tension in the purchase. While a breakout of 6694.00 points would revive selling pressure.
Hourly data chart
Chart in daily data
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