(BFM Bourse) – Jerome Powell’s comments fueled tensions in the bond market. This new surge in yields as well as the conflict in the Middle East weighs heavily on the CAC 40, which lost 1.5% on Friday evening and 2.7% over the week.
Rough week for the Paris Stock Exchange which was once again shaken by tensions on the bond market after restrictive remarks from the President of the American Federal Reserve and the fear of an escalation of the conflict in the Middle East. The CAC 40 closed sharply down 1.52% at 6,816.22 points this Friday, returning to its lowest levels since March, when fears about the banking sector shook the market.
With a weekly decline of 2.67%, the flagship Parisian index is therefore in the red for its fifth week, an unprecedented series since March 2020 and the Covid-19 pandemic.
It must be said that the prevailing climate on the markets does not encourage risk-taking on this day of the three witches, corresponding to the day when several derivative products expire simultaneously – with the exception of future contracts on shares whose maturity is exclusively quarterly.
Of course, the trend is marked by fears of an escalation of the conflict between Israel and Hamas in the Middle East while the market fears repercussions on other countries.
This adverse risk context benefits the ounce of gold, the safe haven par excellence in the event of stock market turbulence. The barbaric relic has just returned to $2,000 per ounce.
On the other hand, the bond market still remains under tension after the latest outing by Jerome Powell, the president of the American Federal Reserve (Fed). In an intervention made after the close of European markets on Thursday, the central banker made certain restrictive remarks.
As a result, bond yields experienced a new surge of fever, with the yield on the 10-year US Treasury bond ending at 4.990% on Thursday evening and even exceeding 5% this Friday before falling back to 4.90%. Yields on 10-year French debt remain around 3.50% to 3.51% this Friday evening.
L’Oréal resists
On the value side, red is required with only a handful of stocks ending the week in green such as EssilorLuxottica (0.6%) which published activity deemed satisfactory by analysts or Worldline (+0.5%) .
L’Oréal lost 1.5%. The group published growth slightly below expectations in the third quarter mainly due to China, with an offensive on gray trade. But the company has managed to achieve solid growth in North America and Europe.
Excluding the flagship index, Technip Energies rebounded by 5.1%, benefiting from the support of Oddo BHF which remains at “outperformance” on the file. The day before, the stock had lost 13.75% in reaction to the publication of an investigation by Le Monde into the involvement of the oil group in a Russian gas mega-project in the context of international sanctions.
Vivendi grew by 2.9%, after a quarterly publication driven by the good performances of Canal+ and Havas.
Verallia, on the other hand, fell by 5%, penalized by the vagueness around its prospects for 2023. The group evaded its growth objective and lowered its profitability objective, after a mixed third quarter.
On other markets, the euro gained 0.10% against the dollar to 1.0593 dollars. Oil contracts are progressing. The North Sea Brent contract rose 1% to $93.27 per barrel while that of the same maturity on WTI listed in New York advanced 0.9% to $89.14 per barrel.
Sabrina Sadgui – ©2023 BFM Bourse