(CercleFinance.com) – The Paris stock market suddenly reversed course at 2:30 p.m. with the publication of a much more vigorous ‘NFP’ than expected (30,000 more jobs than expected by the consensus at +256,000, against a backdrop of unemployment in unexpected decline to 4.1%).
The CAC40 fell from 7,510 (+0.2%) to 7,450 (-0.5%) and the Euro-Stoxx50 fell by 0.8%, below the symbolic threshold of 5,000Pts, towards 4,975.
On Wall Street, the US indices are sinking into the red (-0.5% initially, -1.3% after 1 hour of trading, the day after a public holiday) while on the bond market, the situation is tends more and more with T-Bonds whose yield soars by +7Pts towards 4.751%… the ’30 years’ (+3.5Pts at 4.9500%) hanging towards 2:45 p.m. the symbolic bar of 5.000% (4.999%).
Yields fell slightly following the release at 4 p.m. of American household morale: it deteriorated more than expected in January, according to the monthly survey from the University of Michigan.
Its confidence index fell to 73.2 from 74 last month while economists and analysts forecast a more limited decline to 73.9.
If the component of consumers’ judgment of their current situation improved to 77.9 against 75.1 the previous month, that of outlook fell to 70.2, after 73.3 in December.
The UMich explains this deterioration by their concerns surrounding the evolution of prices, their inflation expectations over a 12-month horizon standing at +3.3% compared to +2.8% last month.
Overall, it is the indication of strength of the ‘NFP’ which predominates and the Dollar took advantage of this to break a new annual record (109.7 on the ‘$ Index’) against a Euro which fell by -0.8 % towards a new multi-year low of $1.0215.
The Euro rises a little but still drops -0.5% towards $1.050, the Pound (-0.6%) continues its tumble towards $1.2230.
The American economy therefore generated 256,000 non-agricultural jobs in December (after +227,000 in November), according to the Department of Labor, a number significantly higher than economists’ expectations, which were generally around 170,000 (in line with the figures published by ADP on Wednesday).
The unemployment rate fell by 0.1 point to 4.1%, where stability at 4.2% was expected, while the labor force participation rate remained at 62.5 %, and that average hourly income increased by 3.9% over one year.
Furthermore, the creations of non-agricultural jobs for the two previous months were revised, from +36,000 to 43,000 for October and from 227,000 to 212,000 for November, i.e. a total revision balance of -8,000 for these two months (status quo in reality ).
This morning, the markets were aware of several statistics concerning France. Thus, in November 2024, French household consumption expenditure on goods rebounded by 0.3% in volume over one month (after -0.3% in October, data revised from an initial estimate which was -0.4 %), according to INSEE.
Furthermore, in November 2024, production in France increased slightly over one month in the manufacturing industry (+0.2%, after -0.1% in October) as in the industry as a whole (+0. 2% after -0.3%), according to INSEE.
The European bond markets are experiencing the shock wave of US T-Bonds with Bunds stretching by +3Pts towards 2.5561%, our OATs by +2.5Pts towards 3.412% (i.e. 85Pts of ‘spread’, without change notable).
Furthermore, the news of the last few hours does not encourage much risk-taking, whether it is Donald Trump’s very offensive speech on trade issues or the surge in British bond yields.
After a particularly favorable 2024 vintage, in particular for American stocks, the risk of a stock market correction has increased at the start of 2025, we warn at Goldman Sachs.
According to the American bank, the probability of a fall of at least 10% in the stock markets within three months and of more than 20% within 12 months now reaches almost 30%, while it was still evolving at a relatively low level in the 4th quarter of 2024.
Over the week as a whole, the CAC is currently showing an increase of just over 2% after three out of four sessions in the green.
On the bond market, the crisis situation continues in the United Kingdom, even if the yield on ten-year Gilts returns to 4.90% after peaking at 4.98% yesterday, not far from the critical threshold of 5%. .
The rate at which the country is indebted, however, still remains at the highest levels since the 2008 financial crisis.
The oil market is heading for a third consecutive week of gains, driven by rising demand despite fears of an economic slowdown and uncertainty over the evolution of interest rates.
Brent soars by +3% towards $79.5, WTI soars by +3.3% near $76 per barrel (after a test of $77 during the session)… it’s not good no more for inflationary expectations.
In French company news, Unibail-Rodamco-Westfield announced on Friday that it had sold a 25% stake in the capital of its Centrum Cerny Most shopping center, located in Prague, to the Upvest and RSJ Investments funds.
Engie announces the extension of its flagship wind farm project located on the shores of the Gulf of Suez, in Ras Ghareb, in Egypt and currently under construction, an extension which will increase the total capacity of this park from 500 MW to 650 MW.
