CAC40: little changed after US NFP, nervous about rates

(CercleFinance.com) - The Paris stock market is looking for direction this Friday: the CAC40 has been trending upwards since the 'NFP' published at 2:30 p.
m., but the 0.3% (towards 7,450) is fragile, and the evolution of the US indices could cool buyers.
The CAC continues to be weighed down by Renault (-1.8%) and Kering (-2%), which is continuing its downward slide, down nearly 7% in five sessions (and -39% since the start of the year).
Over the week, the CAC40 lost -2.5%, the Euro-Stoxx50 -3.5% (the fall of ASML weighed heavily).

On Wall Street, heaviness prevailed, even if the Dow Jones gained +0.3%: in fact, the S&P500 lost around -0.4%, the Nasdaq Composite -1% (below 17.000) and the Nasdaq-100 -1.2% (or -4% hebdo) in the wake of Broadcom -9% or Marvel -3%.
Investors are reluctant to see the glass as half full after the publication of mixed employment figures.
According to the Labor Department, the US economy generated only 142.000 nonfarm jobs in August, 15% below market expectations, with a consensus of +165,000.

The unemployment rate eased by 0.1 points to 4.2% last month, whereas economists were expecting it to remain stable at 4.3%.
The labor force remained stable at 62.7%.

The job creation figure tends to reinforce the impression of a slowdown in US economic growth, and could prompt the Federal Reserve to accelerate its rate cuts by 50 basis points on September 19: it's now 50/50 (with half expecting -25 basis points).

Mahmoud Alkudsi, analyst at ADSS, believes that "This (NFP) data remains in the register of 'bad news to be welcomed', as it means that a 50bp rate cut is clearly on the table to support a labor market that has just completed two feverish months".

Yesterday's ADP figures and Wednesday's 'JOLTS' report had disappointed: "The big question is whether this disappointment was just a blip, or the start of a deterioration that could be much more serious", asks Jim Reid, market analyst at Deutsche Bank.

There were also figures from Europe this morning: French manufacturing output fell in July on a month-on-month basis (-0.9% after +0.9% in June), as did total industry (-0.5% after +0.8%), according to Insee's CVS-CJO data.

Meanwhile, in July 2024, France's trade balance improved very slightly, according to CVS-CJO data from the customs administration, with the deficit coming in at 5.88 billion euros after 5.98 billion in June.

On the bond front, traders are wavering between the -50Pts and -25Pts scenarios on September 19: the yield on 10-year US Treasuries first eased by -8Pts to 3.652 before returning to the previous day's 3.732%, while the '2-year erased -10Pts to 3.645% before recovering +8 to 3.727%.
In Europe, Bunds are virtually stable at 2.200% (vs. 2.2080%) and our OATs have erased -1.2Pt to 2.898% (from a low of 2.845%).
So, while the situation remains "nervous", it's much less so for currencies, with the euro down slightly by -0.2% to 1.1085.
Gold is proving robust, climbing back to $2.51/Oz, while oil is up 0.8% to $73.5 in London.

In French company news, the Stef Group reported sales of €2,325 million for the 1st half, up 6.7% on the same period a year earlier, with net income, group share of €68 million, down 28.3%.

Rubis reports sales of €3339m for the 1st half of 2024, stable compared with the same period a year earlier, with consolidated net income of €130m, down 24% (or -4% on a comparable basis).

Airbus announced on Friday that it had delivered 47 aircraft to 31 customers in August, compared with 52 in the same month last year.

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