The Paris Stock Exchange is progressing in opening, relieved, like the other financial markets, by the less “hawkish” than dreaded tone adopted by Jerome Powell. The President of the American Federal Reserve has indeed reassured by committing to fight against inflation without damaging the economy. The market will therefore pay particular attention to the December consumer price statistics in the United States this afternoon.
At 9:15 a.m., the 40 gained 0.59% to 7.2268.01 points.
During his confirmation hearing before a committee of the American Senate, Jerome Powell announced that the American economy is strong enough to withstand monetary tightening and pledged to prevent inflation from setting in. This orientation should manifest itself in rate hikes, the reduction of the Fed’s asset purchase program and its balance sheet. Jerome Powell did not report any acceleration compared to what had already been announced.
The punch bowl neither too full nor too empty
The Chairman of the Fed delivered a performance worthy of Goldilocks And The Three Bears writes Jeffrey Halley, senior market analyst at Oanda. ” Jerome Powell indicated that the Fed could raise rates to contain inflation, that it plans to quickly begin the process of reducing its balance sheet, but he also announced that inflationary pressures are expected to peak in the middle of this month. year, he summarizes.
He adds that “ what he didn’t say is just as important. He did not say he favored four rate hikes in 2022, did not mention March as the start date for the tightening, nor did he indicate when the balance sheet reduction would begin. “. For him, the chairman of the Fed “ left the bowl [de punch] neither too full nor too empty, but just at the right level in terms of the outlook for the financial markets ».
Watch out for inflation!
Other observers retain from this hearing that the notion of urgency of monetary tightening has not increased significantly since the speech delivered in December at the end of the meeting of the monetary policy committee.
The trend is bullish in Asia this morning. In Hong Kong, the Hang Seng hit five-week highs, boosted by tech stocks, and the CSI 300 of major caps on the Shanghai and Shenzen stock exchanges rose 1% as the slowdown in price rises in production and consumption in China confirms expectations of new support measures to revive the economy. The contracts futures US indices are up slightly after the S&P 500 ended a series of five straight declines on Tuesday evening, while the Nasdaq Composite gained more than 1%.
The highlight of the day is expected at 2:30 p.m. with December consumer prices in the United States. The consensus formed by Bloomberg expects an increase of 0.4% over one month and 7% over one year, which would be a new high of almost 40 years after 6.8% in November. ” Investors believe that inflation should have peaked with the current month’s release and that the trend will reverse before the spring. But, the truth is, no one really knows where we’re headed, all we know is that the Fed waited too long to act, and if today’s inflation numbers are higher than expected, the recent rise in stocks will melt like snow in the sun warns Ipek Ozkardeskaya, senior analyst at Swissquote.
The Fed will publish its Beige Book at 8 p.m., a document that takes stock of the evolution of the economy over the past six weeks. Before that, Eurostat will have unveiled the industrial production statistics for November in the euro zone at the end of the morning.
OVHcloud confirms its annual objectives
Biggest rise in SRD, OVHcloud increased by 4.2%. The specialist in dematerialized IT services (cloud) confirmed its objectives for its fiscal year to August 31, 2022, after having recorded a 13.9% increase in its turnover in the first quarter to 187.2 million euros.
Rexel advance of 4%. The electrical equipment distributor said it exceeded its objectives for the year 2021 thanks to better than expected commercial activity in the fourth quarter. He estimates that same-day sales growth reached 15.3% last year, against a forecast of between 12% and 15%, thanks to a dynamic recovery, particularly in the United States, and the acceleration of inflation. Adjusted EBITDA margin is expected to be 6.2%, versus a forecast of 5.7%.
Within the CAC 40, ArcelorMittal gained 3.1% in the wake of iron ore prices as torrential rains in Brazil interrupted production at the country’s mines, including those of world number two Vale.
Valeo wins 2.1%. Exane BNP Paribas raised its recommendation on the title of the automotive supplier from “underperformance” to “neutral”.
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