BUSINESS

It took the release of the latest US employment data for the stock market to stop believing the end of the rate hike was near, Market News

No, the US economy is not in a recession, nor is it on the verge of a recession. Those who still had doubts are no longer certain as of today and the publication by the Bureau of Labor Statistics of the July employment report, which shows that the world’s largest economy created more than 500,000 jobs last month. “The unexpected acceleration of staff growth in July, coupled with the further decline in the rate of unemployment and renewed wage pressure ridicules claims that the economy is on the verge of recession “comments economist Michael Pearce, to Capital Economics.

528,000 non-agricultural jobs were created UNITED STATES, double what economists predicted. It is also beyond what the US has accustomed the stock market to in recent months (an average of 457,000 per month in the first six months of the year). There, total employment even returned to the February 2020 level, before the health crisis.

Job creation has affected all sectors of the economy. Particularly numerous were the leisure and hotel sectors (+96,000), business services (+89,000) and healthcare (+70,000). “There is no evidence that the slowdown in real estate and manufacturing activity is translating into weaker employment growth”observes Michael Pearce.

Again, the 0.75 point on the table

Also facing a job market “spicy”, according to the economist’s qualifier, the stock market dream scenario that the US central bank would soon stop raising interest rates (because inflation was starting to drop), and even lower them at the beginning of the year. just scrapped, where numerous statements to that effect by several central bankers this week had led to nothing. The president of the Powered of San Francisco, Mary Daly, had specifically stated that the work of the American central bank was ” distant “ end up in the fight against inflation.

Again, based on the CME’s calculations of Fed Funds derivatives, debt market participants see the Fed raises key rates by 75 basis points, in a range between 3 and 3.25% (implied probability of almost 70%)and no longer just 50 basis points just before the statistic was published.

the Bedroom 40 it loses 0.63% today and closes below the 6,500 point mark, at 6,472.35 points, ahead of the release of the US consumer price index for the month of July next Wednesday. The wage figures in the labor report raise fears of self-sustaining inflation. In July, the average hourly wage increased more than expected, by 0.5% compared to June and by 5.2% in one year (4.9% forecast by consensus in July, after 5.1% in the previous month) .

Banks and TotalEnergies benefited from this

On the bond market, however, where August is considered the best month of the year, sovereign debt rates have started to rise again (and therefore their price is falling). The yield on US 10-year bonds increased nearly 20 basis points to around 2.86%. Yields on debt securities with shorter maturities are also increasing, but less markedly. The yield curve is curving again as fears of a recession in the world’s largest economy are easing, which has benefited banks doing what is called maturity transformation: they borrow short-term and long-term loans.


The US ten-year debt rate suddenly jumped into the secondary debt market, to its highest level in two weeks.  The announcement of the contraction of US GDP in the second quarter and the statements by Jerome Powell, head of the Fed, at the end of the last monetary policy meeting had given hope, on the stock market, that the rise in interest rates was on the way to completion in the United States.  Jerome Powell said last week that

The US ten-year debt rate suddenly jumped into the secondary debt market, to its highest level in two weeks.  The announcement of the contraction of US GDP in the second quarter and the statements by Jerome Powell, head of the Fed, at the end of the last monetary policy meeting had given hope, on the stock market, that the rise in interest rates was on the way to completion in the United States.  Jerome Powell said last week that
The US ten-year debt rate suddenly jumped into the secondary debt market, to its highest level in two weeks. The announcement of the contraction of US GDP in the second quarter and the statements of the Jerome Powell, the Fed boss, at the end of the last monetary policy meeting had given hope, on the stock exchange, that the rate hike in the United States was nearing its end. Jerome Powell Said Last Week That “Slow Down At Some Point” As Fed Starts To See Signs Of Cooling In US Economy | Photo credits: FactSet

At the European level, the sector index for the profession gains almost 1%, the best performance just behind the index of enterprises in the “basic resources” (mining) sector, and ahead of the oil companies. In Paris, Agricultural credit earns another 2% on the Cac 40, after a good rise yesterday, following the publication of the second quarter accounts, better than expected, thanks to the record activity for the investment banking division (sale of hedging products for companies against changes in interest rates, currencies, commodities).

Fears of a recession, particularly in England, where the country’s central bank announced it outright by the end of the year, explain the 12% drop in oil prices. oil this week. But even if the course of the Brent of the North Sea remains, this Friday, below the threshold of 100 dollars a barrel, has risen since 14:30. At the time of the close of the Paris Stock Exchange, it is trading at almost 96 dollars (+ 2% compared to yesterday).

Total Energiesdown for most of the session, closing with a gain of 0.5%.


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