(News Bulletin 247) – This article, in free access, is produced by the stock market analysis and strategy research team of News Bulletin 247. To not miss any opportunity, consult all the analyzes and discover our portfolios by accessing our Privileges area.
Let us specify from the outset that despite the public holiday nature of this Monday (08 May, Victory 1945), the Parisian market will be open, and this under the usual conditions of timetables and quotation.
On Friday, the CAC 40 index gained 1.26% to 7,432 points, in the wake of Wall Street, reacting favorably to the exciting content of the monthly federal employment report. A report which in other circumstances could have stressed operators for its potential impact on the firmness of monetary policy.
All targets were significantly exceeded. Firstly on the number of jobs created in the private sector (excluding agriculture), at 253,000 in April. On the closely watched wage dynamics, up monthly by 0.5%, which reflects an acceleration compared to March (+0.3%). And finally on the unemployment rate, which fell to 3.4% of the working population, i.e. almost full employment. The consensus was for stabilization at 3.6%.
On the one hand, the tenor of the figures published today rules out the hypothesis of a recession to come for the world’s largest economy. On the other hand, this stronger than expected employment report will not necessarily encourage the Fed to pivot towards a rate cut. On Wednesday, the US Federal Reserve (Fed) and the European Central Bank (ECB) on Thursday both raised their key rates by 25 basis points, or 0.25 points.
In the end, over the whole week, the balance sheet of the CAC is slightly negative (-0.78%), against a background of volatility. The week will have been rich in emotion after crucial monetary meetings.
“While the ECB has confirmed its meeting-by-meeting approach, based on the statistics, it also expects that there is still some way to go before key rates reach sufficiently restrictive levels”, commented Konstantin VEIT, manager portfolio at PIMCO. “The ECB is not taking a break and will continue to raise interest rates as underlying price pressures remain too strong.” At this stage, inflation in the monetary union has reached 5.6% at an annualized rate, in data corrected for volatile elements (food, energy, alcohol and tobacco).
Emmanuel Auboyneau, Managing Partner of AMPLEGEST, warns against “a second-round inflation, with a wage price loop, [qui] threatens to establish itself. She would be much harder to contain.”
“This more structural inflation is partly due to the opportunity effect of many companies, in the United States and in Europe, which did not hesitate to increase their prices sharply to restore and then increase their margins. are engulfed in a window of opportunity that allowed them to correct lean years. This is particularly true in the food sector where we have seen agreements between producers and distributors on the back of the consumer.”
This specter of the price/wage loop, avoided for the time being, explains the attention paid to employment figures, especially on the other side of the Atlantic where tensions in certain sectors are high.
On the stock side, Air France-KLM returned 2.6%, after publishing a stronger operating loss than expected by analysts and lowering its capacity forecast for 2023. Nexans rose 5.1% driven by the winning the largest contract in its history, worth 1.7 billion euros, with the electricity transmission network operator TenneT. The renewed appetite for the market is also reflected in cheap buybacks on stocks that have suffered in recent sessions. Renault (+4.5%) was supported by Morgan Stanley which resumed its coverage of the title to “overweight” (the equivalent of buying from the bank) judging that the manufacturer has many “opportunities” to protect its volumes and the margins of its internal combustion engine vehicles. Maisons du Monde (+4.4%) and Atos (+4%) also benefited from investors’ buying mood.
On the other side of the Atlantic, the main equity indices rose sharply on Friday, like the Dow Jones (+1.65% to 33,674 points) and especially the Nasdaq Composite (+2.25% to 12,235 points) with the support of Apple. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 1.85% to 4,136 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 $1.1030. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $69.30.
To follow as a priority on the macroeconomic agenda this Monday, the Sentix index of investors in the Euro Zone at 10:30 am.
KEY GRAPHIC ELEMENTS
Beware of the probable commitment of the three-color flagship index in a shoulder, head and shoulders pattern above a graphic base materialized by the bullish gap of March 30, below 7,235 points. We will watch like the milk on the fire, the continuation if necessary of this route to identify work scenarios. In the immediate future, no clear directional asserts itself.
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 7585.00 points would revive the tension in the purchase. While a break of 7234.00 points would relaunch the selling pressure.
The News Bulletin 247 board
Hourly data chart
Chart in daily data
function creatOutbrainJs() {
const creatJs = document.createElement(“script”);
creatJs.defer = true;
creatJs.src = “https://widgets.outbrain.com/outbrain.js”;
return document.body.appendChild(creatJs);
}
window.didomiOnReady = window.didomiOnReady || [];
window.didomiOnReady.push(function(Didomi) {
console.log(“Didomi ready “);
Didomi.getObservableOnUserConsentStatusForVendor(164)
.filter(function (status) { return status !== undefined })
.subscribe(function(consentStatus) {
if (consentStatus === false || consentStatus === true) {
console.log(“Didomi consent -> exécution du script outbrain “, consentStatus);
creatOutbrainJs()
}
});
});
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
