CAC40: ends in red, yields nearly 4% in one week

( – The Paris stock market ends this last session of the week with a decline of 1.43%, to 6925 points, a decline that nothing foreshadowed 20 minutes after the opening (+1%, to 7105 points ).

It is therefore a real cold shower for investors, on the occasion of this session of the ‘4 witches’ which will see the ‘mars’ contract end at its lowest.

The CAC40 ends with a weekly loss of -4%, but nevertheless maintains a gain of 7% since the start of the year.

Stock markets have had a week of great volatility, swinging between heavy dropouts and relief rebounds as the often contradictory announcements regarding the health of the global financial system: the coin falls back on the wrong side on this particular Friday.

Market participants still face a long list of concerns, ranging from the difficulties of Credit Suisse and US regional banks to rising interest rates, not to mention the threat of a global recession.

‘Compared to the period before the financial crisis, the systemic risks are much lower, but we can still expect some difficulties’, we warn at DWS.

The number most watched today was the euro zone’s annual inflation. This stands at 8.5% in February 2023, against 8.6% in January, according to Eurostat data.
The annual inflation rate in the European Union was 9.9% in February 2023, down from 10.0% in January.

The lowest annual rates were observed in Luxembourg (4.8%), Belgium (5.4%) and Spain (6.0%). The highest annual rates were recorded in Hungary (25.8%), Latvia (20.1%)
and in the Czech Republic (18.4%).

On the other side of the Atlantic, after a 0.3% increase in January 2023, American industrial production stagnated in February, announced the Federal Reserve.

In detail, manufacturing production increased by 0.1%. The production of extractive activities fell by -0.6% while that of ‘utilities’ increased by 0.5%. Production is 0.2% below its level of the previous year.

The industrial capacity utilization rate remained stable at 78%, a level 1.6 points below its long-term average (1972-2022).

The index of leading indicators continued to decline in February, the Conference Board announced on Friday, which reinforces the scenario of a recession in the coming months.

This index, considered a precursor, fell for the 11th consecutive month, posting a further decline of 0.3% after its 0.3% drop in January, in line with market expectations.

Finally, the morale of American households deteriorated in March, according to the preliminary results of the monthly survey by the University of Michigan published on Friday.

The confidence index compiled by Midwest University fell to 63.4 from 67 in February, while economists and analysts expected the index to remain unchanged at around 67.

The component measuring consumers’ judgment of their current situation deteriorated in particular, dropping to 66.4 after 70.7 the previous month.

That of the outlook fell to a lesser extent, to 61.5 from 64.7.

The bond markets benefit from the ‘risk-off’ of this second part of the session, and therefore from a ‘flight to safety’: the yield of OATs eases from -16Pts to 2.64%, Bunds from -18Pts to 2.063%, US T-Bonds down -20Pts to 3.38%.

In corporate news, EDF (stable) announced on Friday that Hydro-Quebec had selected three of its wind projects in two calls for tenders that were launched in 2021.

Alstom (+1%) announces the successful delivery of the complete signaling system for the Putrajaya rapid transit (MRT) line, the second line of the Klang Valley MRT project in Greater Kuala Lumpur, Malaysia.

In addition, Alstom has also signed a contract with the Port Authority of New York and New Jersey and Newark Liberty International Airport for the provision of operation and maintenance services for the airport’s Innovia monorail, known as name of AirTrain Newark, for the next 7 years.

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