(CercleFinance.com) – The modest rebound of the first 6 hours did not ‘hold’ and the Paris Stock Exchange reversed course at the close of the markets: the CAC40 finished in the red at around 7,072 points… and recorded a 5th consecutive decline.
The Euro-Stoxx50 remains close to the level of 4,130 Points and shows a decline of -8% since the zenith of July 28 and -4% since September 15.
Wall Street’s opening gains also faded (-0.1% on the S&P500, -0.2% on the Dow Jones) while the barrel of ‘WTI’ soared towards a new annual record with +2.7% to $93.
The other ‘driver’ to watch like milk on fire is the ‘VIX’ which made an incursion on Tuesday evening beyond 18.8, the annual zenith.
A scent of correction has been floating for several days on the world stock markets, many of which have hit major technical supports in a general climate dominated by risk aversion.
Investor morale had deteriorated significantly last week with the prospect of high rates for a prolonged period, a scenario reinforced by the Fed’s latest statements.
The situation got even worse yesterday, since the Parisian market experienced a fourth consecutive session of decline which led it to briefly cross downwards the threshold considered decisive of 7050 points.
While the CAC40 went so far as to post an annual increase of 17% in April, its gain since the start of the year has declined severely to only reach 9% today.
On the European bond market, yields eased by -1.5 basis points after having increased significantly in recent weeks, the German ten-year remaining stable at around 2.785%, the highest since 2011, our OATs fell from 3.3600 to 3.3450%.
In the United States, the yield on the 10-year Treasury bond has risen above the level considered crucial of 4.56%, unheard of since 2007, the ’30-year’ is plunging towards 4.70% ( annual record and even for 16 years).
The gloomy climate was exacerbated yesterday by indicators reinforcing the scenario of an upcoming recession in the United States, also fueled by the threat of a possible ‘shutdown’ at the end of the week.
The Commerce Department announced this Wednesday a timid increase of 0.2% in orders for durable goods in the United States last month, after a fall of 5.6% in July (revised from an initial estimate which was -5 .2%).
Excluding transportation equipment, U.S. orders for durable goods increased 0.4% in August from the previous month, but excluding defense equipment they contracted 0.7%.
According to a recent survey by Goldman Sachs, 77% of investors now expect a recession across the Atlantic over the next two years, with 23% of them thinking it will occur in 2023 and 53% in 2024. .
Regarding currencies, the dollar still benefits from the advantage of a yield on Treasuries that is still much higher than that of European paper, which pushes the euro down by -0.4% towards 1.0532 against the greenback. (which marks a new ‘high’ since March 8).
In France, household confidence in the economic situation is deteriorating, given the INSEE synthetic indicator which lost two points to 83 in September, well below its long-term average (100 between January 1987). and December 2022).
Investors also monitored the release of American oil stocks, while fears of a slowdown in global growth have so far had little influence on crude prices.
Both Arabia and Russia intend to maintain their quota reductions until the end of 2023 and the ‘Brent’ soars by +2.6% towards $96.3 in London (level more revised since the beginning of November 2022 ) and American light crude is currently climbing +3% to almost $93 on the NYMEX, the highest since October 2022.
The only hope of appeasement has just vanished with American crude oil stocks which fell by -2.2 million barrels last week, continuing their downward trend of recent weeks, notably due to a decrease in refinery activity, the US Energy Information Administration (EIA) announced on Wednesday.
Gasoline stocks increased by 1 million barrels, while reserves of distilled products, which include domestic fuel oil, decreased by around 0.4 million barrels.
The refinery capacity utilization rate fell to 89.5%, compared to 91.9% the previous week.
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