The CAC 40 has suffered badly since Tuesday, in the wake of Wall Street, weighed down by stronger than expected inflation in the United States, which augurs a confirmed severity from the Fed, with a strong tightening expected on interest rates. interest. “After the (unpleasant) inflation surprise in September, the signs of resilience of the American economy and especially of high tensions on the job market will not push the Fed to soften its rhetoric”, notes to this respect La Banque Postale Asset Management (LBPAM).
Due to a rebound in car sales in the United States, retail sales fell less than expected in August and “remain at very high levels despite high inflation”, notes the asset manager, who underlines that sales of goods “remain well above their pre-Covid trend”. The resilience of consumption of goods, as consumption rebalances towards services, “suggests that the consumer is holding up well”, and “if US growth is not high, (…) it is nevertheless holding up”, underlines LBPAM.
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Jobless claims remain at historically very low levels, suggesting that the US labor market remains tight, thus supporting wages, which does not bode well for a clear lull on the job front. inflation. “We think the Fed will hike rates by 0.75 percentage points next week for the third time in a row, and the risk is that the Fed will even opt for a 1 point hike, which would be the first since 1984” , warns LBPAM.
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The European Stock Exchange disappointed by the response of Brussels to the gas crisis
In Europe, markets were somewhat disappointed by the European Union’s response to the energy crisis, as shown by the rebound in gas prices this week. The plan presented by the Commission on Wednesday “remains vague, in particular as regards the measures which would make it possible to reduce the demand for gas and electricity or the possibility of a limit on the price of gas imports, and leaves the States the care of choosing how to support their households and their businesses this winter”, notes the asset manager, who underlines that the plan “does not reduce the extreme risks of shortage”.
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Momentum pulled out of the game
Momentum, Capital’s dedicated daily premium investment letter and newsletter, which helps its readers identify entry (buy) and exit (sell) points on stocks (and major cryptocurrencies), has once again knew how to steer his boat this week, by correctly anticipating the course of the CAC 40 (in particular thanks to technical analysis) and by identifying opportunities to buy… and sell.
We delivered our expectations (bullish or bearish) on the CAC 40, the S&P 500 (Wall Street), Worldline, Eurofins, Sartorius Stedim Biotech, Sodexo, Euroapi (resulting from a split from Sanofi), Prodways, or even Gafa such as Facebook or Apple, among others… And for cryptocurrency enthusiasts, we have analyzed ether (Ethereum), which is currently on the razor’s edge.
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On the satisfaction side, stocks like Dassault Systèmes, Capgemini, Apple and Sartorius have plunged as expected since our bearish expectations. And our selection of stocks (to buy or hold, to bet on the rise) has generally cushioned the shock, some having shown notable resistance, such as TFF, Euroapi, or having soared, such as Prodways (+9% Thursday !).
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Author’s declaration of interests