(BFM Bourse) – The Paris Stock Exchange is still losing ground, while inflationary fears are at the heart of investors’ concerns at the start of a new quarterly results season.
The main barometer of the Paris Stock Exchange no longer has the fuel to fuel the slightest attempt to rebound. Tinted bright red, the CAC 40 lost 0.85% to 5,790.99 points in the wake of Wall Street and Asian markets. The Paris Stock Exchange is thus well on its way to a fifth downturn.
Risk aversion dominates stock markets as the start of the quarterly publication season coincides with another rise in bond yields and renewed tensions on the geopolitical front. In addition to the nervousness, there is a good dose of caution, judging by the low trading volume (665 million) at this stage of the session.
Investors are showing their caution at the start of a week dominated by the start of the quarterly results season – with LVMH’s turnover as of Tuesday, before the accounts of American banks on Friday – and numerous statistics including those relating to inflation in the United States. The US consumer price index, which is expected to be released on Thursday, will be closely watched by investors.
Markets will also be watching for the publication of the minutes (the “minutes”) of the last meeting of the US Federal Reserve, which could confirm the continuation of monetary tightening by the Fed. A scenario still favored by operators after the latest figures on US employment. The FedWatch tool now assigns a close to 80% probability of another Fed rate hike of 0.75 percentage points, compared to 20% of investors betting on a 0.50 percentage point hike in early November.
Strong tensions in the bond market
“After last week’s strong US jobs data, markets will be watching the US Consumer Price Index (CPI) on Thursday. “Overall inflation could ease slightly, but not enough to radically change the tone of the Fed”, notes Vincent Boy, market analyst at IG France. Note the yield on the 30-year US bond, which hit a nine-year high of 3.955% this morning, while the 10-year US also tends to a few fractions of 4%, the highest since July 2008. .
Still on the bond chapter, the Bank of England announced on Tuesday that it was extending its debt buyback program to inflation-indexed bonds due to persistent “dysfunctions” in the markets.
The stock market crash in the technology sector
On the side of values, the technology sector is in the wrong direction after the measures taken by Washington on the export of semiconductors to China. STMicroelectronics lost 2.4%, Worldline lost 2% and Dassault Systèmes 1%.
Capgemini fell more than 2.6% as Jefferies removed the French group from its list of its favorite European stocks. ArcelorMittal was also ousted from this list and fell by 2.1% on Tuesday.
Sanofi takes more than 1%, the pharmaceutical company having reported positive results in a phase III trial (last stage of clinical trials before possible marketing) evaluating the use of their Dupixent treatment in children aged 1 to 11 years. with active eosinophilic esophagitis, with significant improvement over placebo.
LVMH sells 0.6%. The French giant will publish its third quarter sales this Tuesday after the market.
In the aftermath of a sharp rebound, Renault lost 4.8%, investors are wondering about the financial impact of the rebalancing of the alliance between the car manufacturer and its partner Nissan.
On the foreign exchange market, the dollar is still well oriented, buoyed by its status as a safe haven and a few days away from important inflation data. One euro traded for $0.9694 against $0.9702 on Monday. Oil prices lost more than 2% with WTI trading at 89 dollars and a barrel of Brent at 94.05 dollars.
Sabrina Sadgui – ©2022 BFM Bourse