Cac 40 down more than 1%, Credit Suisse plunges on default fears

The Paris Stock Exchange begins the fourth quarter in the red, in an environment degraded by an influx of bad news. The weakening of the manufacturing industry in Europe, the setbacks of Credit Suisse and the probable reduction of production by OPEC+ weigh on a morale already damaged by a double-digit inflation rate in the euro zone and the prospect of a strong reaction from central banks to stem the rise in prices.

Mid-session, the Bedroom 40 fell 1.06% to 5,701.39 points. Elsewhere in Europe, the Dax of the Frankfurt Stock Exchange lost 0.78% and the Footsie Londoner 0.79%. The contracts future on American indices evolve between a gain of 0.3% for the Dow Jones and a decline of 0.4% for the Nasdaq 100. Wall Street has chained three consecutive quarters of decline for the first time since the global financial crisis.

Eurozone economy further weakened

The manufacturing PMI index established by S&P Global for the euro zone came out at 48.4 points in September, a low of 27 months, against 48.5 in the first estimate and 49.6 in August, sinking further below the critical threshold of 50 which separates growth and contraction of activity.

The pernicious combination of a manufacturing sector in recession and an acceleration of inflation highlighted by the latest PMI data is further weakening the economy of the euro zone. Excluding the months of lockdowns imposed during the health crisis, demand and production from eurozone manufacturers had not shown declines of such magnitude since the height of the global financial crisis in early 2009. says Chris Williamson, chief economist at S&P Global.

An aggravating inflationary factor, the barrel of Brent from the North Sea rebounded by almost 4% following press reports that OPEC+ delegates were preparing to discuss a reduction of more than 1 million euros on Wednesday. barrels per day of their production, which would be the strongest since 2020. Oil prices have fallen by more than 30% since the peak of last March, after the invasion of Ukraine by Russia. In Paris, TotalEnergies gains 2.2% and Vallourec 4.5%. The oil and gas Stoxx 600 posted the strongest sector increase with a gain of 1.8%.

Considered as defensive, stocks related to telecoms are progressing likeOrangeup 1.6%.

New low for Credit Suisse

In Zürich, Swiss credit falls another 7% to new all-time lows, dragging the banking sector in its wake. BNP Paribas, Agricultural credit and Societe Generale thus lose between 1.4% and 2.2%. Swiss bank officials worked over the weekend to reassure key customers and shareholders of its financial strength, according to the FinancialTimes. The cost of hedging for default risk (CDS or Credit default swap) jumped about 15% last week to reach levels not seen since 2009, reflecting fears of a default.

Is such an eventuality possible? For Ipek Ozkardezkaya of Swissquote: “ Yes, it is possible, but it is highly unlikely. Credit Suisse is certainly ‘too big to fail’. What could happen is a miracle at Christmas and the new CEO of the bank will strengthen the institution within 100 days as promised and the bank will be thriving again until the next scandal. Or that it becomes a prime target and is swallowed up by another bank. Or that she be rescued by the Swiss authorities. »

In the foreign exchange market, the pound rose as high as $1.1280 this morning after Finance Minister Kwasi Kwarteng announced that the UK government has backed away from the abolition of the top tax bracket on income. This project, criticized in the very ranks of the Conservative Party, had caused the fall of the pound and a surge in the yield on government bonds (gilt), forcing the Bank of England to intervene to buy long-term debt.

Air France-KLM degraded

Tech stocks are struggling again. Capgemini, Dassault Systems and Worldline yield more than 3%.

Air France-KLM give up 7%. HSBC downgraded the airline’s title from “buy” to “keep”.

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