(CercleFinance.com) – Did you doubt it? Bad news in a context of central banks determined to bring down inflation is a boon for the stock markets, which have gone from “cautious” mode to euphoric mode in the space of 2.5 hours.
The term seems appropriate with a CAC40 going from +0.6% at 14.30 to +2.3% at 17.00 (at 6.170).
The CAC40 index passes the 6,100 mark again and then fell back above 6,150 to invalidate the bearish signal from Wednesday and Thursday in weekly data.
The week’s results have become much more presentable again: CAC40 has fallen from -4% to -2% in 24 hours.
Among our neighbors, the euphoria is also at its highest with +3.2% in Frankfurt (+400Pts to 13,030Pts) and this pulls the E-Stoxx50 up, with +2.6% to 3,545.
On Wall Street, the 3 main indexes rose +1.1% on average and the scores were very homogeneous: an upward acceleration occurred after the publication of industrial orders in the United States. They fell by -1% in July, reflecting a slowdown in manufacturing activity, according to data published by the Commerce Department.
Economists, on the contrary, expected a 0.2% increase after a +1.8% increase the previous month.
This decline, which ends a streak of nine consecutive months of increases, is mainly due to a drop in orders for turbines and generators for the energy sector and a drop in orders for military aircraft.
Inventories rose 0.1% while shipments fell 0.9%, resulting in an inventory-to-shipment ratio of 1.47, down from 1.46 in June.
The ‘NFP, which was published at 14.30, had also been well received because it was more in line with expectations (the beginning of moderation in the labor market).
The US economy generated +315,000 nonfarm jobs created last month (+308,000 private sector jobs).
The July figure was virtually unchanged (to 526,000 against 528,000 originally announced), but the June figure was reduced by -105,000 to 293,000.
The August figure is broadly in line with expectations, which were mostly in the 300,000/320,000 range.
The surprise comes from the unemployment rate rising to 3.7%, while the Reuters consensus left it unchanged at 3.5%, the same as the previous month.
The workforce remained at 62.4%, hourly wages rose moderately by +0.3%.
“The history of economic cycles suggests that in order to bring inflation down, it is necessary to go through the destruction of jobs and a significant increase in unemployment”, the economists from Oddo BHF recall.
“To date, although the Fed has already raised its key interest rates by 225 basis points, nothing similar has happened”, the private bank emphasizes.
And the August NFP does not herald a radical reversal of US economic dynamics.
At the same time, the euro rose above parity with the dollar (+0.75% to 1.0025), oil rose by +2.6% in London (vs. $94.6) and bond yields fell significantly: OAT erased -5Pts to 2, 13%, Bund -5.5Pts at 1.51% and T-Bond 2032 -5Pts at 3.215% (’30 year’ down 3.54% around 3.51%).
In their latest market update, however, the Kiplink Finance teams describe a market context that is ‘much too heavy’ to hope for a convincing recovery.
“The deterioration of the economic scenario in the last two weeks puts the Parisian index in a delicate position”, assesses the Parisian management company.
In corporate news, Societe Generale (+2.8%) is amplifying the recovery in the Paris market this Friday in the wake of an increase in the recommendation to buy from analysts at Bank of America.
In a research note published yesterday, the BofA teams indicate that they have raised their recommendation on the value, raised from ‘neutral’ to ‘buy’, with a price target raised from 28 to 35 euros.
Total Energies recovered by +3% in the wake of the barrel (+2.4% on WTI on NYMEX).
Air Liquide confirms its desire to withdraw from Russia and has signed a letter of intent with the local management team with the aim of transferring its activities in this country to it in the form of an MBO (management buy out).
Saint-Gobain announces that it has completed the sale of its Saint-Gobain Glassolutions Grand Ouest glass processing business to a group of private investors led by former heads of the building materials group. The group also announces that it has entered into exclusive negotiations for the sale of its Crystals and Detectors business.
Goldman Sachs downgraded its advisory on Air Liquide shares, reducing it from ‘buy’ to ‘neutral’ with a price target cut from 174 to 124 euros. The financial intermediary says that he assesses the valuation of the specialist in industrial gases as “too rich” in light of the slowdown in activity that threatens the industry.