Stock market: CAC 40, Stellantis, bitcoin, Michelin, Liquid Air… this week on Momentum
The CAC 40 remained close to its recent peak despite Fed (United States central bank) official James Bullard’s strong statements about the need to raise the key rate higher. markets under conditions of high inflation. “While the idea that key rates will continue to rise, but more gradually, closer to 5% (in the medium term, editor’s note) seems to be accepted, the idea of a ‘pivot’ (which is almost a change. In 2023, the Fed’s the policy of raising the key interest rate, Ed) has returned to high gear”, notes La Banque Postale Asset Management (LBPAM), but “the dialogue between the Fed and the market remains difficult”.
“The market thinks that the monetary authority will reduce pressure on the economy by easing monetary policy by lowering key rates. A decrease of 0.5 percentage points is expected at the end of 2023,” the asset manager said. Several members of the FED expressed their views on the need to continue the restrictive policy for a certain period of time. St. Louis Fed President James Bullard yesterday even indicated that key interest rates could go higher than he expected, namely 5%,” LBPAM emphasizes.
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At this stage, the ‘pivot’ belief “may still support the stock market, plus more positive sentiment on China (the easing of zero-Covid policies and the implementation of support measures for the sector’s real estate, Editor’s note) and further oil price declines”, but “it is difficult to see how inflation will be managed without restrictive fiscal conditions for some time. In this context, a recession, even a moderate one, seems to us the most likely scenario”, warns LBPAM, which expects a significant decline in the profits of listed companies However, it’s not in the stock prices, according to the asset manager, who remains cautious about the stock.
LBPAM notes that the U.S. economy “remains resilient,” making the Fed’s job “difficult,” according to key demand statistics. Thus, the latest figures on consumption, retail sales, “suggest that household spending has bucked the trend of slowing in previous quarters. Consumption resists. The fact is that there are no visible signs of weakening in the labor market,” said the asset manager.
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Momentum, Capital’s dedicated daily premium newsletter and investment letter, has done well or moved in the right direction with many bullish expectations for stocks (LVMH, EssilorLuxottica, Hermès, Believe, Vilmorin, Ipsos, Métropole Télévision, etc.) this week.
Still, we are pleased that we have correctly predicted the CAC 40’s performance in recent weeks and recent sessions. We have been rightly cautious about ether and bitcoin.
This week, Momentum analyzed the outlook for the CAC 40, as well as many stocks (Stellantis, Sodexo, Liquid Air, Pernod-Ricard, Capgemini, Michelin, Saint-Gobain, Believe, Schneider Electric, etc.). bitcoin, to cryptocurrency enthusiasts.
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