2023-06-02 15:45:29
The Paris Stock Exchange ended the week better than it started, but the rebound of the last two days, following falling to a two-month low, did not allow the Cac 40 to escape a second consecutive weekly decline. The index ended with a gain of 1.87% today, at 7,270.69 points, in low trading volumes, following a rise of 0.55% yesterday.
In New York, the S&P 500 rose 1.2%, the Nasdaq Composite 0.9% and – a rarity since the new boom for technology stocks and artificial intelligence companies – the Dow Jones outperformed with an increase by 1.7%.
Amazon, soon a mobile offer? Falling Orange
However, within the index of large industrial companies, Verizon Communications fall of 5% while, according to the financial information agency Bloomberg, Amazon is studying the launch of a mobile phone offer for its “Prime” members in the United States. In Paris, on the Cac 40, Orange sign of the largest drop in the Cac 40 (-1.3%), while Renaultone of the most cyclical stocks, is at the top of the charts (+5%) with the manager of shopping centers Unibail-Rodamco-Westfield (+5,3%)
On the Dow Jones, another company very sensitive to the health of the economy is driving the trend: Caterpillar (+6,5%).
With the hurdle of the debt ceiling now lifted following the vote of both chambers of Congress, the official May employment report in the United States was the last major event of the week. And he kept his promises. The nonfarm sector added 339,000 jobs last month, marking a sharp acceleration from 294,000 (revised from 253,000) in April and confirming that the US economy remains resilient.
The consensus formed by Bloomberg was counting on 195,000 job creations. The unemployment rate, however, increased by 0.3 points to 3.7% of the active population, once morest 3.5% expected and the average hourly wage appreciated by 0.3% over one month, following +0.4 % in April, and 4.3% over one year, where the market expected stabilization at 4.4%. If the strength in hiring does not support a pause in the Fed’s rate hike cycle, the lull in wages and the rise in the unemployment rate might be well received by the central bank.
“Growth weak enough to calm inflationary pressures, but not too weak either at the risk of causing a recession, it is on this ideal trajectory that the Fed would like to see the economy evolve.explains the chief economist of the private bank Oddo BHF, Bruno Cavalier. This is the ‘immaculate disinflation’ scenario. » The perfect scenario for the stock market.
The “very good news” of the slowdown in wages
Paul Ashworth, North America economist at Capital Economics, points out that because “As conditions on the labor market are better balanced, the upward pressure on wages diminishes. Despite the 0.3% increase over one month in May, the annual growth of the average hourly wage fell from 4.4% to 4.3%. As a result, the Fed can still afford not to raise interest rates in June,” he concludes.
Kim Forrest, head of investments at Bokeh Capital Partners, notes that “if the number of jobs created seems high, wages are not increasing as quickly” as upward pressure on earnings eases “because more people are entering the labor market. » He adds that the slowdown in wage growth “is very good news for those of us who think the Fed should take a break.”
Philadelphia Fed President Patrick Harker said on Wednesday that ” the moment [était] come to at least press the stop button for the duration of a meeting and see how things evolve. As for Governor Philip Jefferson, recently appointed vice-chairman of the Fed, he noted, this same Wednesday, that “ the absence of a rate hike at a future meeting would allow the monetary policy committee to see more data before making decisions on the extent of further firming. By contrast, St. Louis “hawk” James Bullard believes interest rates are at the low end of what should be a tight enough policy to combat the inflation.
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