Paris: the red bet after the publication of US employment – 2022-10-07 at 17:20
(CercleFinance.com) – The CAC40 is lining up a 3rd consolidation session (Tuesday’s rebound of +4.3% is increasingly a ‘FOMO’ rebound figure) and adds -1% to the 0.8% lost on Thursday and 0.9% lost on Wednesday.
The Parisian index rose in a few hours from 5955 points to 5855, before a small rebound towards 5.875… but nevertheless maintained a gain of +2% over the week reimbursed.
The Euro-Stoxx50 drops by -1.5% with possibly an additional -1% since the publication of the ‘NFP’, the US Department of Labor’s monthly US employment report.
On Wall Street, the S&P500 fell from stability before the NFP to -1.8%, the Nasdaq for its part falling by -2.5% to 10,800 and the Dow Jones by -1.4% to 29,500.
The US economy generated 263,000 non-farm payrolls in September (250,000 expected), according to the Labor Department.
There are +288,000 in the private sector, which means that 25,000 jobs have been lost in the education and health sectors.
August job creations were revealed at 315,000 and 11,000 were added in July (at 537,000).
One of the highlights is that the unemployment rate fell 0.2 points to 3.5% (vs. flat at 3.7% expected), replacing the tight labor market with a hyper apparent -full employment.
The labor force participation rate remained more or less stable at 62.3%, a level which nevertheless remains 1.1 points lower than in February 2020, and the average hourly income has accumulated at a annual 5%.
Regarding wages, they only changed by +0.3% in September (lowest pace since December 2021) and +4.98% over 12 months.
This is the 18th month in a row where inflation is rising faster than wages: the loss of purchasing power of Americans is inexorably worsening.
The reception is not good, neither for bonds in the US (T-Bonds smoking +8pts at 3.90%) nor in Europe: our OATs deteriorated by 12pts to 2.803%, Bunds by 12pts towards 2.200 %… and Italian BTPs by +20pts to 4.700%.
In the UK, Gilts are up +10Pts towards 4.2600% as the Bank of England says it will continue its rate hikes ‘no matter what’.
As a reminder, the ADP firm had estimated, on Wednesday, at 208,000 the creation of non-agricultural jobs in the private sector in September, a number roughly in line with the consensus, after the 185,000 creations recorded the previous month.
There are signs that people are returning to the labor market. Demand from employers remains robust and the supply of workers is improving, for now,’ commented Nela Richardson, chief economist at ADP.
On the European side, France’s trade balance reduced a deficit of more than 15.3 billion euros in August, compared to a deficit of 14.8 billion the previous month, according to CVS-CJO data from the customs administration.
On the values front, Renault is going it alone on the rise with +6% supported by a positive analyst rating.
AXA announces that it has completed the placement with institutional investors of an issue of senior unsecured Reg S bonds for an amount of 850 million euros maturing in 2030, with an order book subscribed nearly three times.
Similarly, Vinci was part of the successful placement of a 650 million euro bond issue maturing in October 2032, oversubscribed 2.5 times, as well as an EPC contract for a regasification terminal in Germany.
Plastic Omnium indicates that it has finalized the acquisition of Varroc Lighting Systems, for an enterprise value of 520 million euros, revised downwards from 80 million to take into account a degraded market environment.
Capgemini announces that it has entered into an agreement to acquire Braincourt, a specialist in business intelligence and data science, which has strengthened its capacity to meet the demand for data services and data analysis in Germany and Northern Europe.
Finally, Stifel declares its recommendation to maintain but increase its price target to 1230E on the Hermès share. “We raised our sales and EBIT for the fiscal year 22-23E by 1% and 3%, respectively,” begins the analyst.