The Paris Stock Exchange erased its gains despite the rebound of Wall Street, which nevertheless reduced its gains. This trend reversal is the result of rising gas prices and the still “hawkish” comments from James Bullard. The president of the St. Louis Fed reiterated that inflation is a serious risk to which the Federal Reserve must respond “appropriately” at the risk of compromising its credibility. The monetary tightening cycle will continue for some time to come, he added.
The contracts future on gas in Rotterdam rose by 6% following the announcement of leaks on the Nord Stream gas pipelines at the level of the Baltic Sea. Denmark has tightened its security measures around its energy facilities, and Prime Minister Mette Frederiksen said it ” it’s hard to imagine that these are coincidences, adding not not being able to rule out sabotage “.
Around 4:30 p.m., the Bedroom 40 takes 0.25% to 5,783.65 points (+0.07%) after a peak at 5,852.61 points (+1.44%) in a business volume of 1.5 billion euros. In New York, the Dow Jones gains 0.75% and the Nasdaq Composite 1.30%.
On Monday, the S&P 500 closed at its lowest level since December 2020. The Vix index measuring the underlying volatility of the broader index ended above 30 points yesterday for the first time since June. Weighed down by fears that the US Federal Reserve’s hawkish turn could lead to a recession, the S&P 500 is now trading at 15.5 times estimated earnings, compared to an average of 17.2 times over the past ten years , prompting bargain hunters to attempt opportunistic purchases.
Returning Tech
Investors remain on the alert in the face of the almost inevitable scenario of a recession in Europe. Goldman Sachs strategists are now “underweight” equities in their latest asset allocation for the next three months, while remaining ” overweight on liquidity, believing that the peak of inflation and interest rates has not been reached. Citigroup points out for its part that the bearish positions continue to increase.
The dollar’s surge to unprecedented levels tends to limit the appeal of risky assets in general, and weighs in particular on the pound sterling, which has hit a historic low against the greenback, and on the euro, at most low for 20 years. The British currency is recovering somewhat, mainly driven by expectations of a rate hike by the Bank of England (BoE) to support the pound. The BoE said it ” watch closely » the evolution of the markets and that it will not hesitate to toughen its policy if necessary. She added, however, that she will proceed to ” a full evaluation at its next meeting “, scheduled for November.
On the bond market, the yield on the British 10-year bond tightened by 8 basis points to 4.34%. That of the American Bond of the same maturity rose by 9 basis points to 3.95%.
Tech stocks rise in the wake of Nasdaq’s rebound. STMicroelectronics gains 2.7%, OVH Cloud 5.5% and Worldline 2%t. The title of the specialist in payments is supported by the forecasts of its competitor Nexi, which expects to generate around 2.8 billion euros in excess cash over the period 2023-25.
Conversely, Kering dropped 3% following a downgrade by Barclays, going from “overweight” to “weighted in line with a price target reduced from 800 to 555 euros.
The relative weakening of the greenback favors the rebound in oil prices, the barrel of Brent from the North Sea recovering 2.8% to 86.39 dollars after falling below the 85 mark the day before for the first time since January. TotalEnergies took advantage of this with a gain of 2.6%.