AOF France/Europe closing analysis – The CAC 40 begins the month of December on a positive note

(AOF) – European markets benefited little from Fed Chairman Jerome Powell’s remarks, which boosted Wall Street on Wednesday night. US indices are subject to profit taking today. Investors heard last night what they wanted to hear, that the Fed should slow the pace of rate hikes in December. Markets assign a 77% probability to such a scenario. In Paris, technology companies benefited from the drop in long rates. The CAC 40 gained 0.23% to 6,753.97 points and the EuroStoxx50 rose 0.32% to 3,977.38 points.

In Europe, Heineken (+3.04% to 90.96 euros) organizes its investor days on December 1 and 2. At this event, its leadership team will share progress and details on EverGreen, its strategy to shape the future of beer . This time, the brewer confirmed that it forecasts for 2022 an operating profit margin slightly higher than last year as well as for 2023, an organic growth in its operating profit of between 5% and 10%, subject to any unexpected macroeconomic and geopolitical developments.

STMicroelectronics (+2.30% to 36.885 euros) posted one of the strongest increases in the CAC 40 and Soitec (+4.75% to 160.85 euros) one of the biggest gains in the SBF 120. Like other technology stocks, French semiconductor specialists are benefiting from the decrease in long rates caused yesterday by the Fed Chairman’s remarks. They also announced the next step in their collaboration on silicon carbide (SiC) substrates with STM’s qualification of Soitec’s substrate production technology.

Solutions 30 (+8.44% to 1.896 euros) recorded the biggest increase in the SBF 120 after confirming that it is currently working on a new improved offer project on some Scopelect assets. The latter is an Orange subcontractor for the maintenance and installation of telecom networks, which was placed in receivership at the end of September. The digital technology specialist “aims to offer robust and long-term recovery solutions”.

The macroeconomic figures of the day

The contraction of the French manufacturing sector will be greater than first announced in November, according to a new estimate from S&P Global. The purchasing managers’ index came out at 48.3 against a preliminary estimate of 49.1, which economists expected to be confirmed. This indicator rose to 47.2 in October. A PMI below 50 indicates a recession in the sector.

The euro area seasonally adjusted unemployment rate was 6.5% in October, down from the 6.6% rate recorded in September 2022 and from the 7.3% rate recorded in October 2021, according to Eurostat, the statistical office of the European Union. The unemployment rate of the European Union was 6% in October 2022, down from 6.1% recorded in September 2022 and from 6.6% recorded in October 2021.

The contraction in the euro zone’s manufacturing sector was slightly larger than first forecast in November, according to a new estimate from S&P Global. The purchasing managers’ index came in at 47.1 against a preliminary estimate of 47.3, which economists expected to be confirmed. This indicator rose to 46.4 in October. A PMI below 50 indicates a recession in the sector.

The contraction in Germany’s manufacturing sector was larger than first forecast in November, according to a new estimate from S&P Global. The purchasing managers’ index came out at 46.2 against a preliminary estimate of 46.7, which economists expected to be confirmed. This indicator rose to 45.1 in October. A PMI below 50 indicates a recession in the sector.

In Germany, October retail sales fell 2.8% on the month against the consensus of -0.6% after rising 1.2% in September.

225,000 jobless claims were registered last week in the United States against the consensus of 235,000. There were 241,000 registrations last week, a revised figure of 240,000.

US household income rose 0.7% in October and consumption rose 0.8% in the same month. The market expected +0.4% and +0.8% respectively after 0.4% and +0.6% in September.

The PCE price index, the Fed’s preferred measure of inflation, rose 0.3% in October. This was lower than expected compared to expectations (+0.5%), against +0.3% last month. Excluding volatile energy and food items, this index (core) rose 0.2% in October, compared to a consensus of +0.3% and +0.5% in September.

In the United States, the purchasing managers’ index for the manufacturing sector in November came out at 47.7, very close to the consensus established at 47.6, S&P Global indicated. It was 50.4 in October.

In the United States, the purchasing managers’ index for the manufacturing sector (ISM) in November came out at 49 while it was expected at 49.8 after 50.2 in September.

Construction spending fell 0.3% in October in the United States as expected. They rose 0.1% in September.

At the close, the euro gained 0.84%​​​​​​to 1.0495 dollars.