(BFM Bourse) – The Paris Stock Exchange continues its slide with a drop of 0.8% this Thursday evening. Risk aversion rises a notch before the publication of official US employment figures for the month of September.
Another feverish session in Paris… Despite its attempted rebound at the start of the session, the Paris Stock Exchange continues a second session of decline, undermined by the downward trend of the major American indices.
The CAC 40 lost 0.82% to 5936.42 points the day after a decline of a similar magnitude. Investors are becoming aware that the Fed will not go against its monetary tightening movement, a scenario that had contributed to the recent rebound in global indices.
Operators had seen in the slowdown in US manufacturing activity a sign of a possible inflection by the Fed. But solid job creation in September in the private sector and healthy activity in services dashed these hopes of a more accommodating Fed. The latest statements by the president of the San Francisco Fed point in this direction, Mary Daly having warned the markets against any anticipation of a rate cut in 2023.
The FedWatch tool thus assigns a probability of more than 70% for a further Fed rate hike of 0.75 percentage points in early November, only less than 30% of investors are betting on a hike of 0.50 percentage points . It is in this context that the official US employment report for the month of September will be published on Friday after an increase in weekly jobless claims to 219,000 new claims.
A fight against inflation far from won
The fight against inflation is therefore far from won for the Fed, which has already warned that rates should continue to rise in the coming months. Especially since the upward trajectory of oil prices should fuel inflationary pressures. On Wednesday, the OPEC+ countries endorsed a drastic drop in their oil production target. Oil prices are at three-week highs. Brent barrel trading at over $94 and WTI at $88.65.
Oil stocks were sought after, such as CGG (+5%), Technip Energies (+2.6%). Only TotalEnergies is missing (-1.2%), penalized by its counterpart Shell (-2.9% in London). The oil group warned that its performance in the third quarter would be penalized by a deterioration in its gas activities and its refining margins.
As for values, Aramis Auto limited its gains to 1.15% after completing the acquisition of the leader in Austria in the sale of reconditioned vehicles Onlinecars. Still in this automotive universe, Faurecia (+4.4%) and Valeo (+3.3%) also ended up the day after heavy releases.
On the other hand, mining and steel stocks were on the mat after an avalanche of unfavorable recommendations for the sector. Eramet sank by more than 20%, weighed down by Exane BNP Paribas, which downgraded the stock to neutral with a target slashed from 123 to 88 euros. ArcelorMittal lost 3.7%, penalized by a degradation of UBS which goes neutral on the file.
On the foreign exchange market, the dollar continues to benefit from its safe haven status. The euro is trading at 0.9820 dollars and the pound sterling for its part yields 1.5% to 1.1176 dollars.
Sabrina Sadgui – ©2022 BFM Bourse