(CercleFinance.com) – Any consolidation of the markets seems impossible.
The ‘ascada’ of the CAC40 (-0.2%) between 6.028 and 6.093 (or + 1.1% taken from the lows of the day) illustrates this wonderfully.
Nothing, no decidedly nothing will come to the end of the Wall Street rally: after barely 2.5 hours of quotes, the US indices are back in the green (except the Dow Jones … for now) and resume their record price.
It is already potentially an 8th session of increase out of 9 looming, a 7th absolute record has just been registered by the Nasdaq at 9.734, and it does not seem to want to stop there (the S & P500 has just returned to its zenith yesterday, a new all-time record in the next few minutes!).
Wall Street is once again much more resilient (completely deaf and waterproof?) In the face of bad news from China than European markets: the Euro-Stoxx50 which fell more than 1.3% this morning (3.799 at most low) ends at -0.2% (at 3.847) … and in electronic transactions, the return to equilibrium seems certain.
The news was not good this morning: the Chinese authorities returned to their initial method of counting people ‘positive’ to the Covid-19 contamination test (in accordance with WHO recommendations) and the ‘fix’ to the rise is brutal with nearly 15,000 new cases.
Far from having exceeded its peak last Wednesday, the epidemic is spreading and accelerating in China, but also in Singapore … and Japan has just officialized the 1st death on its own soil.
The Chinese province of Hubei, epicenter of the COVID-19 epidemic, reported on Wednesday 14,840 new confirmed cases and 242 new deaths, the worst daily toll since the start of the pandemic … and it is not the the only region affected by the epidemic.
Factory closings are prolonged, airlines suspend China / foreign or USA / China traffic until the end of April.
Despite these very negative elements, the downturn in the markets appears very moderate and does not call into question the upward trend in force since October 2.
‘Graphically, this bullish phase remains in progress and should find its peak in the resistance zone between 6.195 and 6.215 points. The different intermediate points at 6.110 and 6.155 should not act as a strong resistance, but more as a brake on the upward bullish trend ‘, analyze the Kiplink teams this morning.
Remember that by winning more than 0.8% yesterday, the Paris market had established an annual closing record at 6,104.7 points, very close to its zenith in 2020 hit on January 17 at 6,109.8 points.
In terms of statistics, consumer prices in Germany rose 1.7% in January on an annual basis, an inflation rate higher than that of 1.5% observed the previous month, according to Destatis which therefore confirms its preliminary estimate at the end of January.
After +0.1 point the previous quarter, the unemployment rate in France (excluding Mayotte) as defined by the ILO fell sharply in the fourth quarter of 2019, from 8.5% to 8.1% of the workforce , according to data from INSEE (but this is at the cost of a record number of radiation of 400,000 people, the return to employment only accounts for 20% of the apparent drop in unemployment) and in mainland France, it stands at 7.9%.
The day was also punctuated by the publication of weekly jobless claims, which increased marginally, from +2,000 to 205,000 (the 4-week average remains unchanged at 212,000).
Consumer prices rose only 0.1% in January from the previous month, according to the US Department of Labor, while economists predicted an increase of 0.2% on average.
In terms of core data (excluding energy and food products), inflation stood at + 0.2%, a level in line with market consensus.
Compared with January 2019, the price index increased by 2.5% in raw data – the highest annualized rate observed since that of October 2018 – and by 2.3% excluding volatile elements last month.
To fully understand the apparent invulnerability of Wall Street to bad news, it should be noted that the FED injected almost $ 49 billion in the form of ‘repo’ this morning (daily injection) and $ 30 billion in the form of repo at 14 days … when operators demanded almost twice ($ 59 billion)!
In today’s news, Rexel (+ 9.8%) remains largely at the top of the SBF-120 ranking, far ahead of Legrand (its competitor), leader of the CAC40 with + 4.5%.
Legrand publishes group share of net income up 8.2% in 2019, at 834.8 million euros, and an adjusted operating margin (at 2018 scope) of 20.4% of sales, an improvement of 0.2 point.
Pernod Ricard, although exposed to China and Asia for many spirits still gained + 3.5%
Orange Group revenue increased + 0.6% to 42,238 ME in 2019 and + 1.1% in the 4th quarter, accelerating compared to + 0.8% in the previous quarter. He has, in passing, confirmed his objectives for the current year.
La Française des Jeux (FDJ) announces a net result down 21.9% to 133 million euros for 2019, after taking into account in particular the costs of IPO, but an EBITDA up 9% to 346 million, a stable margin of 17.7%.
Airbus consolidated sales (-2.8%) rose to 70.5 billion euros in 2019 compared to 63.7 billion euros in 2018. Consolidated order intake in 2019 increased to 81, 2 billion euros (55.5 billion euros in 2018), bringing the value of the consolidated order book to 471 billion euros as of December 31, 2019 (460 billion euros at the end of December 2018).
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