Halt on the stock market, the Federal Reserve faces a “real problem” with American employment

Posted 2 Dec. 2022 at 17:39

Highly anticipated, the official US employment report sent the Paris market down. Like its counterparts, it was disappointed by more job creations than expected in November. Expected at 200.00, they indeed reached 263,000, after 284,000 in October. ” This is the seventh time in a row that the consensus is too low “says John Plassard at Mirabaud Gestion. While this is the weakest job gain since April 2021, the labor market remains healthy and tight, above the average of 150,000 to 200,000 jobs created per month before the pandemic, adds the expert.

The Fed’s 50 basis points questioned?

Additionally, the jobless rate held steady at 3.7% of the labor force and average hourly wages, another key component of the Labor Department report, rose 0.6% in the month, more than double. market estimate, and 5.1% YoY, which is also well above the 4.6% forecast. “ Let it be said, American employment is still strong despite all the announcements of layoffs in the technology sector in particular. This phenomenon (because it isan uncommon phenomenon) poses a real problem for the US Federal Reserve which planned (and plans) to bring down inflation through (in particular) the rise in the unemployment rate », concludes John Plassard.

Should we draw a line under the prospect of a slowdown in the pace of the rise in Fed funds rates from December? The Fed’s monetary policy committee meets on December 13-14, with a verdict scheduled for 2-8 p.m. (Paris time). According to CME Group calculations, the market assesses the probability of a 50 basis point hike in the cost of money on Friday afternoon at 75%, compared to 78.2% on Thursday, the day after Jerome intervened. Powell in front of the Brookings Institution. He then reassured, saying that the next rate hike would be a little less brutal than the previous ones (which were 75 basis points).

At the close, the Cac 40 gives up 0.17%, to 6,742.25 points, after three sessions of increase. The volume of transactions totals 3.4 billion euros. Over five days, the Parisian index nevertheless gained 0.44%, ie a ninth consecutive week of increase, a series not seen since the period March-May 2009. On the other side of the Atlantic, Wall Street is more accusing of the blow. the Dow Jones loose 0.6% and the Nasdaq Composite 1%.

Teleperformance’s “recovery operation” continues

On the values ​​front, Teleperformance (+3.3%) continues its operation “ regaining investor confidence “. The call center manager has signed a global agreement with UNI Global Union, including commitments on freedom of association, health and safety and content moderation. It will be implemented in Colombia, Poland, Jamaica, El Salvador and Romania over the next few weeks.

In terms of analyst ratings, HSBC raised its price target on EssilorLuxottica (+1.43%) from 195 to 210 euros and Oddo BHF went from “neutral” to “outperformance” on Pierre & Holidays (+4,54%).

Finally, TotalEnergies continued to decline, yielding 0.64%. OPEC member countries and their allies could decide to maintain oil production quotas as they stand at the meeting scheduled for Sunday, December 4.

C.P.

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