The Palais Brongniart, former headquarters of the Paris Stock Exchange. (photo credit: Adobe Stock)
(CercleFinance.com) – The markets reacted negatively to the US employment figures which were considered very strong (+528,000) and the Paris Stock Exchange accelerated its decline towards 6,455, i.e. -0.9%, which reduces the weekly profit to a symbolic profit of +0.1%.
The Euro-Stoxx50 fell -1% (3,720), leading to an increase of +0.6% last week. On Wall Street, the Dow Jones is expected to fall -0.8%, the S&P500 -1.2%, and the Nasdaq should lose more than 1.5%.
The Dollar jumped + 0.9% against the Euro towards 1.014 and + 1.1% against the Pound (the United Kingdom is in recession for 4 quarters according to the BoE which predicts a negative GDP of -1 .5% in 2023) .
The monthly US jobs report said the US economy generated 528,000 nonfarm payrolls in July (372,000 in June), according to the Labor Department, a figure above the consensus of +250,000, and the number of unemployment fell by 0.1 point to 3.5%, thus returning to the pre-Covid level, at the beginning of February 2020.
The labor force participation rate stood at 62.1%, a level that remains 1.3 points lower than in February 2020, and the average hourly income increased at an annual rate of 5.2%.
In addition, job creation for the two previous months was revised, from 384,000 to 386,000 for May and from 372,000 to 398,000 for June, ie the total balance of the revision is +28,000 for these two months.
So the labor market remains one of the last major drivers of the American economy that remains strong, with job creation still strong and an unemployment rate that remains at very low levels, which shows a situation of full employment. .
The prospect of increasing the rate of the Federal Reserve is growing and the bond markets reacted negatively: the T-Bonds tightened by + 12.5Pts towards 2.80%, erasing the gains of the week.
According to CME Group’s FedWatch Barometer, the market estimates a 65% chance of a 50 basis point Fed hike next month and a 40% chance of a quarter point hike.
In Europe, our OATs and Bunds recovered +6pts to 1.415 and 0.864% respectively, BTPs posted only +2pts to 2.85% (‘spread’ narrowed to just +200pts against the Bund).
Investors know this morning the increase in production in June 2022 in the manufacturing industry in France (+1.2% after +1%) as in the industry as a whole (+1 .4% after +0.2%) , according to data adjusted for seasonal changes and working days (CVS-CJO).
INSEE, which published these figures, determined that production increased again in capital goods (+ 3.5%) and transport equipment (+ 2.8%), and changes in the extractive industries, energy , water (+ 2.4%) as well as food industry (+ 2.2%).
Production in the second quarter of 2022 was higher than in the same quarter of 2021 in the manufacturing industry (+2%). For industry as a whole, the increase was more modest (+0.2%) due to a fall in energy production.
France’s current balance of payments fell sharply in the second quarter, mainly due to higher energy bills, data released by the Banque de France showed.
The current account deficit stands at 8.6 billion euros in CVS-CJO quarter data, a deterioration of 7.5 billion compared to the first quarter already in deficit (-1.1 billion).
In addition, France’s trade balance showed a deficit of almost 13.1 billion euros for June, compared to a deficit of 12.9 billion in the previous month, according to CVS-data.CJO of the Customs Administration.
As earnings season approaches, some European heavyweights are also due to unveil their quarterly accounts today, including German insurance giant Allianz.
In securities news, Rothschild & Co published in the first six months of the year, the net income group divided by 28% to 249 million euros, ie EPS of 3.43 euros, despite revenues of 2% to of around 1.38 billion euros.
Maurel & Prom published for the first half of 2022 a net profit of 138 million dollars, more than four times the annual comparison (32 million a year ago), and a gross operating surplus of 250 million, increased by 113%.
Finally, Sanofi announced the establishment of a collaboration with the Innovent Biologics laboratory, which has a large footprint in China, aimed at making new drugs available to patients suffering from difficult to treat conditions. of cancers in the country.