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The Paris Stock Exchange closed down 0.40% on Friday, January 19, as the market came to terms with the idea that interest rate cuts from European and American central banks could come later than expected.
>> The Paris Stock Exchange closes higher
>> The Paris Stock Exchange is losing ground as it waits for American investors to return
>> The Paris Stock Exchange bows to the statements of the central bankers
The control room of Euronext, the company that manages the Paris Stock Exchange. Photo: AFP/VNA/CVN
The flagship CAC 40 index fell 29.71 points to 7,371.64 points. However, over the week, the CAC 40 fell by 1.25%.
“Markets were convinced that the Federal Reserve (Fed) would cut interest rates six times or more in 2024,” but central bankers “used this week to temper those expectations as much as possible,” comments Florian Ielpo, economist by Lombard Odier AM.
Members of the American and European central banks have multiplied their statements rejecting the idea of a fall in interest rates as rapid and significant as markets expected, while a large proportion of investors are predicting an initial decline in interest rates in March.
If “oil prices, which influence inflation trends, are lower” than expected, recent macroeconomic releases underline that economic activity still remains robust, explains Valérie Rizk, economist at Hugau Gestion.
Several macroeconomic signals so far show that American demand is far too solid and inflation is not yet under control for a rate cut to be decided.
American inflation was higher than expected in December, retail sales surprised with their good performance, jobless claims fell to their lowest level in more than a year and on Friday, January 19, the University of Michigan consumer confidence index surprised with its showed optimism.
In detail, the barometer climbed to 78.8 points in January, the highest level since July 2021, 13% more than in December, while analysts expected a slight decline.
However, one certainty remains: “The question is no longer if, but when the key interest rates will fall,” summarizes Valérie Rizk.
The President of the European Central Bank (ECB), Christine Lagarde, on Wednesday January 17 considered a rate cut this summer “likely”, recalling that “certain indicators are not anchored at the level at which we would like them would see”.
Teleperformance at the top of the CAC
Teleperformance rose 8.61% to 143.25 euros, topping the Paris CAC 40 index, thanks to an improvement in Stifel’s recommendation for the stock following its acquisition of the company. Luxembourg-based Majorel specializes in customer experience and business process outsourcing services.
“We recognize that it may be too early to tell and that the shares could be volatile in the near term,” but Stifel analysts “do not rule out the possibility that the shares will strengthen more than three years from now.” double,” it said in a statement.
AFP/VNA/CVN
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