The Paris stock market is decidedly relentless, and once again reverses course, moving from a 0.5% dip around the 7,200-point mark to a +0.5% rise towards 7,272. Wall Street didn't get off to a great start, with mixed results as the Dow Jones clawed back 0.2%, while the S&P500 lost -0.4% and the Nasdaq -0.8%.
Once again, it's hard to justify the European stock markets' rally in a trivial way, given the news of the day: there are nothing but negative factors, be it stats, interest rates or corporate results.
And this upturn cannot even be credited to the euro (which was the case the day before), which fell back -0.5% on Thursday towards $1.0600.
The first estimate of inflation in the eurozone for the month of February cannot be considered a positive point: the consumer price index fell symbolically to 8.5% year-on-year, after 8.6% in January, according to Eurostat, but the drop was smaller than expected (due to the +15% surge in food prices).
The consensus was for inflation to fall from 8.2% to 8.3% (the process of disinflation since October's peak of 10.6% is therefore slowing).

'In view of the stronger-than-expected resilience of economic activity and the labor market, the scenario of "persistent" core inflation may well remain a major concern for the ECB, and markets are beginning to factor in further rate hikes', warns Danske Bank.

Later today, the European Central Bank is due to publish the "minutes" of its February 2 meeting, which resulted in a 50 basis point hike in its main interest rates.

At the time, the Frankfurt-based institution confirmed that it expected to raise rates by a further 50 basis points in March, citing in particular the persistent rise in food prices and the effect of wage increases.

"This just goes to show how well the 'hawks' have the situation under control", sum up the teams at Oddo BHF.
Non-farm productivity grew by just 1.7% annualized in the US in the fourth quarter of 2022, according to a second estimate from the Labor Department, which had announced a rate of 3% on first reading a month ago.
This downward revision, which was stronger than economists had anticipated, was due both to a fall in output growth, to 3.1%, and an increase in the number of hours worked, to 1.4%.
Taking into account a 4.9% increase in hourly wages (instead of 4.1% in the preliminary estimate), unit labor costs rose by 3.2% in the last quarter of 2022 (instead of 1.1% in the first reading).

As an immediate consequence of these poor figures, bond markets continued the downward trend that began in early February.
US T-Bonds saw their yield jump by +6pts to 4.056%, the '1-year' to 5.10% and the '6-month' to 5.18%.
Our OATs added +2.5pts to 3.222%, Bunds +2.5% to 2.7360% and Italian BTPs +4pts to 4.604% (the October 2022 highs are approaching).

In corporate news, Veolia reports net income before non-recurring items of 1.16 billion euros for 2022, up 29.7% (+27.7% at constant exchange rates), and EBITDA of nearly 6.2 billion, up 7.2% at constant scope and exchange rates.

Vallourec reports net income, Group share, of -366 million euros for 2022, compared with +40 million for the previous year, and EBITDA of 715 million euros, representing a margin of 14.6% compared with 14.3% in 2021.

SMCP (Sandro, Maje, Claudie Pierlot) reports, for 2022, a doubling of net income to 51 million euros and strong growth in adjusted EBIT to 111 million (9.2% of sales) from 96 million in 2021.

Lastly, Technip Energies is reporting adjusted EPS of 1.79 euros for 2022, versus 1.39 euros the previous year, as well as an adjusted recurring EBIT margin up 50 basis points to 7%, on adjusted sales down 4.6% to 6.42 billion.

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