(CercleFinance.com) – After having lost more than 3% during yesterday’s session, the Paris stock market dropped an additional -1.4% 45 Mn from the close, towards 6,430 Pts, and seems to be heading towards a ‘ low’ of the week, which shows a loss of -3.8%.
The opposite represents a drop of -400Pts since Tuesday 3 p.m. (more than 6%), one of the most violent pullbacks since the downward sequence from September 13 to 20 (6,350/5,980).
The Euro-Stoxx50 also dropped -1.2%, lining up with Wall Street, with the Nasdaq losing only -0.9%.
Markets are reacting negatively after announcements of further rate hikes in the face of the threat posed by inflation.
The US Federal Reserve, the European Central Bank (ECB) and the Bank of England (to a lesser extent) surprised investors with the harshness of their remarks, favoring the rise in the dollar, the rise in bond yields and a sharp decline technology stocks on Wall Street.
This morning, investors learned of a contraction in France’s composite flash PMI index. This fell from 48.7 in November to 48.0 in December, its lowest level since February 2021, thus signaling an acceleration in the decline in overall activity at the end of 2022.
The decline was driven by an accelerating contraction in services, with service providers reporting the biggest decline in activity in almost two years, while the rate of contraction in manufacturing output fell to a seven-month low.
The (small) good news is that the inflation rate in the euro zone slowed to 10.1% year on year in November, against 10.6% in October, according to figures published Friday by the agency Eurostat.
For comparison, this rate was still 4.9% in November 2021.
By country, the lowest annual rates were observed in Spain (6.7%), France (7.1%) and Malta (7.2%) and the highest annual rates in Hungary (23. 1%), Latvia (21.7%), Estonia and Lithuania (21.4% each).
In the EU as a whole, the annual inflation rate also slowed to 11.1% in November from 11.5% in October. It was 5.2% a year earlier.
BdF boss Villeroy de Galhau estimates that inflation should peak in France in the first half of 2023 before tending towards 2% by 2025 (so not before 24 months).
According to Eurostat, the euro zone’s seasonally adjusted trade balance stood at -28.3 billion euros in October, compared to -36.4 billion the previous month, thanks to a decline in imports (-3, 2%) stronger than that of exports (-0.4%).
For the European Union as a whole, the balance came out at -39.4 billion euros, again up on the previous month (-47.7 billion), with decreases of 3.7% for imports and 0.8% for exports.
On the bond front, rates rose sharply on Thursday evening (+15pts on our OATs and Bunds, +52 on Italian construction in 24 hours from 3.85 to 4.37%).
Today, our OATs are deteriorating by +11Pts towards 2.714%, the Bunds by +10Pts towards 2.187% (and +20Pts on Italian BTPs).
After a sequence of saloon doors on the FOREX on Thursday, the $ stabilized around 1.0620 against the Euro and against the Pound, losing 0.35% against the Yen.
Oil suffered a heavy pullback of -3.5% in London ($78.7) and New York with the resurgence of the risk of recession in 2023.
In corporate news in France, Societe Generale announced on Friday the successful increase of its car leasing subsidiary ALD, which was subscribed at 175%. This capital increase with maintenance of preferential subscription rights, for an amount of approximately 1.2 billion euros, should make it possible to create the world’s leading player in sustainable mobility, by financing the takeover of LeasePlan.
Voltalia announces the commissioning of South Farm, a 49.9 megawatt solar power plant in the United Kingdom, which will supply clean electricity to the City of London Corporation under a power purchase agreement (CPPA) signed at the end of 2020.
Copyright © 2022 CercleFinance.com. All rights reserved.
Did you like this article ? Share it with your friends with the buttons below.
