CAC 40: Why the rise in unemployment in the United States is causing the CAC 40 to rebound

Cac 40: With a 3% increase, the Paris Stock Exchange achieves its best weekly performance since the end of June

(BFM Bourse) – The announcement of a slowdown in job creation and a rise in unemployment last month in the United States paradoxically gave fuel to the Parisian index. the CAC 40 closed the day’s session up sharply by more than 2.2% back on 6,100 points. On a weekly basis, the Parisian index nevertheless yields 1.7%

The latest US jobs report has been welcomed by the markets. Up slightly at midday, the Paris Stock Exchange accelerated its rebound after the publication in the early afternoon of US employment figures for the month of August. They reveal a slowdown in the creation of new jobs across the Atlantic, as well as a contained increase in the average hourly wage.

the CAC 40 closed a stone’s throw from its high of the day (6177.07 points), up 2.21% to 6167.51 points on Friday. The burst of pride observed this weekend will however be insufficient to close the week in the green, the Parisian place having lost 5% over the last four sessions. On a weekly basis, it returned another 1.7%, bringing its accumulated losses to 13.7% since the start of the year.

After the company report ADP, Wednesday, weekly jobless claims, Thursday, the official report acts as a “justice of the peace” in terms of the health report of the job market in recent weeks across the Atlantic. Official statistics show a slowdown in job creation since the US economy (excluding agriculture) created 318,000 jobs in August, according to the Labor Department report. This is much more than the 298,000 creations expected by the consensus but significantly below the level of July with 526,000 jobs. The unemployment rate meanwhile points up for the first time since January, by 0.2 points to 3.7%. In July, it was at 3.5%, the lowest since February 2019. As for wages, their increase is contained at 5.2% where analysts expected an increase of 5.3%.

Bad economic news… hailed on the stock market. Because the report of the day feeds the hopes of the operators on a moderation of the rate hike rate by the American Central Bank (Fed) at its next meeting, on September 21 and 22. The probability of a rate hike of 0.5 percentage point has thus risen to 36%, against only 25% the day before, with the majority of operators still anticipating a rise of 0.75 percentage point in the weeks to come.

On Wall Street, the reaction was also positive with a gain of 1% for the S&P 500 as for the Dow Jones at the time of the European close. The Nasdaq Composite followed the trend with a rise of 1.1%, ahead of the long Labor Day weekend. Wall Street will indeed remain closed on Monday for Labor Day, which marks the real end of the holidays across the Atlantic.

In Europe, investors became aware a little earlier in the morning of an acceleration in producer prices in the zone euro for the month of July. They rose by 4.0% over one month and 37.9% over one year in July. In this context, the European Central Bank will also be expected to turn in its response to control high inflation.

Oil prices recovered on Friday after a tough week ahead of the OPEC+ meeting of oil exporters. The barrel of Brent from the North Sea for October delivery rose 2.2% to $94.21 while the WTI for September delivery was up 2.5% to $88.48.

Buyer flows on Saint Gobain after the transfers

On the values ​​front, Saint Gobain ends up 3.7% after the announcement of the sale of its “Crystals and detectors” activity and that of glass processing sites in the north-west of France. The French building materials champion has been increasing sales for several months as part of its strategic plan called “Grow & Impact”.

Oil stocks are recovering in the wake of the rise in oil prices: TotalEnergies appreciated by 2.2% while Technip Energies, for its part, rose by 1%.

Atos won 6.6%, Lisa 5.8% and Elior completes the list of SRD Parisians with an increase of 5.2%.

On the smaller cap side, Abivax soared more than 11%, biotech reassuring the market by securing crucial financing.

Europlasma closed the week up more than 12%. Its subsidiary Intertam announces that it has concluded a framework agreement with the Algerian company SO.GE.B.ZRITA, which specializes in asbestos removal.

Showroomprivé gained 3.2%, The manager and co-founder of the e-commerce site David Dayan increases his stake to 37.17% of the company’s shares and now holds 47.81% of the voting rights.

On the foreign exchange market, the dollar fell against theeuro after the release of US unemployment figures in August, theeuro trading at $1.0024 (+0.7%). The greenback took full advantage of its safe haven status, to reach records against many currencies including the yen which plunged against the dollar, to its lowest level in 24 years.

Sabrina Sadgui – ©2022 BFM Bourse

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