(BFM Bourse) – The Parisian index dropped 1.31% on Friday, to 6,077.30 points, as the markets are worried about both the deterioration in the economy and the next meeting of the American Federal Reserve.
A week to forget for the Paris Bourse. Like other markets, the Parisian rating has experienced all the trouble in the world to recover from the above-expected US inflation figures, which were published on Tuesday.
This Friday the CAC 40 lost another 1.31% to 6,077.30 points, chaining a fourth consecutive decline. Over the whole week, the Paris index fell 2.17%.
Fedex wrong delivery
Recession fears have increased after the severe warning issued by the international freight transport specialist Fedex, whose activity constitutes a form of leading indicator of the world economy. Following a disappointing first quarter marked by a drop in its parcel volumes, Fedex withdrew its objectives for the 2022-2023 financial year and plunged more than 22% on Wall Street.
“Investors feared this was the proverbial ‘canary in the coal mine’, heralding a series of corporate target cuts when the US earnings season begins in early October, notes Michael Hewson of CMC Markets. .
“The fact that Fedex expects the US economy to go into recession has caused traders to play it safe, and there are not many who are ready to buy the market,” observes Naeem Aslam of AvaTrade. “It is very likely that other companies will send a similar message in the days to come,” he fears.
Heading to the Fed
Investors are feverishly awaiting the US Federal Reserve meeting next week. A severe turn of the screw should be operated, especially since recent US indicators have hardly been likely to soften the Fed’s position.
“After the surprise on the rise in inflation (…) the signs of resilience in the economy and above all of high tensions on the job market will not push the Fed to soften its rhetoric”, notes Xavier Chapard from La Banque Postale Asset Management.
“We think the Fed will hike rates by 75 basis points (0.75 points) next week for the third time in a row, and the risk is that the Fed will even go for a 100 basis point hike. That would be a first since 1984”, he continues.
Real estate companies resist
On the other markets, the euro gained 0.3% against the dollar at 1.0026 dollars.
Oil contracts are regaining ground after posting steep declines in recent sessions. The North Sea Brent contract for November delivery is up 1.3% at 92.04 dollars while WTI for October delivery is up 1% at 85.97 dollars.
In terms of values, the vast majority of SBF 120 securities ended in the red. The veterinary laboratories Vetoquinol and Virbac fell by 10.2% and 18% respectively after publishing half-year results which received an icy reception.
For its part, GTT lost 3.3% penalized by a new sale of shares by Engie. Property companies performed well supported by analysts’ reports. Mercialys gained 4.5% thanks to Oddo BHF which went from “underperformance” to “outperformance”. Gecina for its part advanced by 2.6% thanks to JPMorgan which raised its advice to “overweight” against “neutral” previously.
Julien Marion – ©2022 BFM Bourse