Cac 40: Despite progress in US debt, markets worried about Fed policy

(BFM Bourse) – The Paris Stock Exchange starts June in the green after a complicated trading month in May. After gaining 1% at the high of the session, the CAC 40 is limiting its gains to 0.55% in response to the latest US job creation numbers.

The Paris Stock Exchange is off to a slightly better start this June after losing more than 5% throughout May. The CAC 40 saw a burst of pride, rising more than 1% at the high of the session as investors breathed a sigh of relief after a major breakthrough on the difficult topic of the US debt ceiling. . This text was approved by a very clear majority (314 votes for, 117 against) overnight from Wednesday to Thursday in the House of Representatives. The US Senate must now vote on this agreement in order for it to enter into force and avoid default by the US.

The confirmation of a slowdown in the euro area supported the trend, the increase in consumer prices was 6.1% over a year after 7% in April. In core data, excluding volatile items such as food and energy, the rise is limited to 5.3% over a year after 5.6% in April.

But that enthusiasm waned as the session wore on, especially after the latest US labor market numbers, which should prompt the Federal Reserve to raise its key interest rates again. The CAC 40 closed up 0.55% at 7137.43 points after a brief foray into negative territory around 16:00.

According to the ADP survey, the private sector actually added 278,000 jobs in May, versus the 170,000 expected by consensus. On Wednesday, investors had looked gray after the JOLTS report highlighted continued tensions in private employment, with more than 10 million jobs created in April. Following this statistic, markets estimated the probability that the Fed will continue with a 0.25% interest rate hike at the conclusion of the June 13-14 monetary policy meeting at nearly 70%.

Still, Fed Governor Philip Jefferson and Philadelphia branch president Patrick Harker advocated a monetary status quo after the monetary meeting. To know the Fed’s intentions on its future monetary policy, investors will have to wait until tomorrow for the official US employment figures, just like every first Friday of the month.

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Casino still lower

Airbus rose 2.8% as the planemaker posted 30% annual growth in aircraft deliveries in May, according to Reuters, citing people familiar with the matter. Airbus also announced a firm order from Air Algérie for seven A330neo and A350 aircraft.

On the other hand, Casino fell 9.4% to close at a record low. Its leader Jean-Charles Naouri is currently being heard by the financial brigade, while his group, in financial difficulties, finds itself at a crucial moment.

Rémy Cointreau deepened its decline (-5%) after announcing results for the 2022-2023 financial year without surprise and confirming its outlook for the current financial year.

On the SME side, Carbios gained 7.9% driven by the announcement of significant funding from the State and the Grand-Est region for the construction of its plastic biorecycling plant.

In the other markets, the euro rose 0.5% against the dollar to $1.0745. Oil prices rise sharply after falling. The contract for August delivery of Brent from the North Sea rose 3.1% to $74.86, while the July contract for WTI listed in New York rose 3.7% to $70.61 a barrel. barrel.

Sabrina Sadgui – ©2023 BFM Bourse

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