(CercleFinance.com) – The CAC40 is back in the green (+0.4% to 5,845): were the ‘firefighters’ urgently dispatched this afternoon to Europe and Wall Street while the 3 main US indices gladly sank their annual floors?
The joint and undifferentiated rise of +1.5% in the US indices (Dow Jones -0.2%, S&P500 -0.8%, Nasdaq -1.3%) seems to be part of ‘heavy intervention’ after the big shower cold which the markets fell victim to at 2:30 p.m. with the most anticipated figure since the beginning of October, ie the US CPI.
Inflation is stronger than expected and the CAC40 lost up to -2% to 5.701 (around 4 p.m.) when it had just peaked at 5.880 two hours earlier (fall of -3% in a straight line, as part of a counterpoint which will be among the most violent of the current year).
A few buyers had attempted a bluff before publication, causing the CAC to rise by more than 1% between 12 p.m.
They manage to limit the damage with this rebound of +130 Pts from the CAC in 1 hour.
But inflation and the response from the central banks that it generates is not the only concern: France finds itself plunged into a context of social tension and above all of possible paralysis of activity with service stations at drought, strikes in nuclear power plants, a strike by dockworkers and rumors of a stoppage at the SNCF and the RATP from the beginning of next week: without fuel and without public transport, it is the scenario of 1995 which is beginning to emerge with the resulting risk of a sudden plunge into recession for the country.
The call for a general strike by the CGT – if it were followed, which would be unprecedented since May 68 – is likely to worry France’s creditors and our OATs have their yield jump by +7pts towards 3.02 % before returning to equilibrium towards 2.94%, the Bunds even relax by -2 Pts to 2.32% against 2.42H around 3 pm.
The monthly report on inflation in the United States published by the Department of Labor turns out to be worse than the worst forecasts: the US consumer price index rose by 0.4% in September and by +8.2 % compared to the same month of 2021 (after 8.3% in August, but Jefferies, like many other brokers, anticipated a decline to 8.1%).
Excluding energy (+19.8%) and food products (+11.2%), two traditionally volatile categories, the annual ‘core’ inflation rate increased by +0.4% to 6.6% on last month, the worst score since… 1982.
Claims for unemployment benefits increased by +9,000 during the week of October 3 in the United States, these amounting to 228,000, against 219,000 the previous week, according to the Department of Labor.
The four-week moving average – which can be considered a better indicator of the labor market’s underlying trend – is also up slightly, standing at 211,500 against 206,500 a week earlier.
The FED’s ‘minutes’ released Wednesday evening did little to reassure: ‘Fed officials expect rates to remain elevated for some time. They will continue to increase them until they see clear signs of a slowdown in inflation,” summarizes the Californian bank Wells fargo.
The yields of US T-Bonds tightened by +17Pts towards 4.08% before a pullback towards 4.000%, the ’30 years’ also reached 4%.
The Euro relapsed by -0.5% towards $0.9655, only the Pound Sterling recovered by +0.8% while Liz Truss let it be understood that she would be about to backtrack on her tax reform, which makes many observers say that the Bank of England and the markets have ‘won’ (but at the cost of abysmal losses in value on the ‘Gilts’ UK: they relax by -15Pts on the ’10 years’ to 4.28%, from -20Pts on average on the ’20 years’ and the ’25 years’ to 4.7500%.
As for values, luxury is suffering: Hermès relapses by -4%, Pernod Ricard by -3% and LMVH by -2%.
Eiffage announces the acquisition of 70% of the capital of SNEF Telecom, a subsidiary of the SNEF group and a key player in the French mobile telecommunications market with a turnover of nearly 200 million euros in 2021.
The day after its meeting with the trade unions, TotalEnergies (+2%) indicated that it had informed them that it was willing to consider a budget for 2023 salary increases on the basis of 2022 inflation.
In addition, the group announces the allocation to all of its employees worldwide of an exceptional bonus corresponding to one month’s salary which will be paid in December, subject to salary agreements in the various countries and subsidiaries concerned.
Oddo BHF reaffirms its ‘outperformance’ opinion on Sodexo with a price target raised from 82 to 92 euros, while the catering and services group is to hold an investor day (CMD) on November 2 in Paris.
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