Advertorial — Red October on the stock market, the Cac 40 having posted a third losing month in a row, by 3.5%, after declines of around 2.4% in both August and September. Which brings the increase in the flagship index to 6.3% since the start of 2023 and which above all took it out, from the bottom, of the channel of 7,000 to 7,500 points in which it was operating. Another negative signal, at the end of October, the Cac 40 showed a sequence of six weeks of decline, unheard of since June 2011!
We knew this third quarter publication season was risky, so this was confirmed. In an environment where interest rates will remain students
And for a long time
, according to the now well-established formula of Fed Chairman Jerome Powell, investors no longer want to take risk, and they have therefore punished, sometimes very strongly, disappointments. They now need “zero defects”.
In this exercise, it is the payment solutions group Worldline which paid the heaviest price on the stock market, collapsing on October 25 by more than 59%. Never has a Cac 40 company fallen so much in a single session in the entire history of the index since its creation at the end of 1987! Growth slowed from July to September and margins will deteriorate rather than improve this year. The 2024 objectives will be updated at the start of next year.
Even Sanofi…
Another big victim, Alstomwhich plunged by almost 38% on the 5th of the month, after having had to admit that free cash flow would be negative by 500 to 700 million euros for the 2023-2024 financial year, far from anticipation initial free cash flow significantly positive
. Faced with delivery delays, the railway manufacturer highlighted the increase in stocks – while production is ramping up – to explain this turnaround.
Even Sanofi, known to be very defensive and a heavyweight on the market, sank, dropping some 19% during the session of October 27. A historic fall for the pharmaceutical laboratory. Beyond results slightly below expectations in the third quarter, what does not call into question the 2023 financial year is the sharp downward revision of the 2024 outlook and the abandonment of the strategic objective for 2025 which constituted a real cold shower for investors.
The United States at full speed
No risk taking, therefore, especially when we know, moreover, that an entry into recession seems imminent in Europe, if this is not already the case (the GDP of the euro zone fell by 0.1% in the third quarter compared to the previous one). In the United States, on the contrary, the economic machine continues to run at full speed, with growth of 4.9% at an annualized rate over the period from July to September. During this time, inflation is falling, of course, but too slowly to be able to claim victory… Therefore, the scenario of a rapid fall in American rates in 2024 is losing credibility. However, it was he who had raised the hopes of the stock market for many months, as well as that of seeing China, the world’s second largest economic lung, revive. This is still not the case…
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