(CercleFinance.com) – The Paris stock exchange finally grabbed 0.12% at the end of the session, well helped by a handful of financial stocks (Société Générale at 5%%, AXA at +2.8%, BNP Paribas at +1.9%).
For its part, Wall Street which increases its decline (-0.7% on the Dow Jones, -1.3% on the S&P500, -1.8% on the Nasdaq).
Moreover, the E-Stoxx50 fell -0.68%, the DAX -0.77%, and London lost 0.71%.
The decline in the barrel of oil (the ‘Brent’ falls back towards $100/barrel in London) should relieve the markets, but the decline in energy stocks (and associated stocks) then weighs on the trend (this is also true for W-Street at opening).
Fears about global growth linked to the repercussions of the war in Ukraine (expected GDP at -45% in 2022) and the deterioration of health in China, with the implementation of new confinements (surreal scenes of thousands of people deprived of food and drugs, many victims reported in Shanghai) in fact raise fears of a heavy drop in exports to the West and serious ‘disruptions’ (shortages of spare parts, paralyzed industries).
It should be noted that among the new sanctions envisaged by the EU against Russia, there is a boycott of its oil and an additional list of personalities who could see their property confiscated.
On the bond compartment, the upward trend in rates is confirmed this morning with a ten-year US yield which is moving close to 2.76%, the ’20-year’ is testing 3.000%, its highest level in almost three years, our OATs flirt with 1.29%.
Gold is holding up remarkably well and climbing by +0.5%, on contact with resistance around $1,960.
‘The equity markets are still in the recovery phase after the seller’s episode at the beginning of March, but investors still favor defensive stocks and sectors linked to commodities’, notes Liberum.
These cautious developments fuel the debate on the risk of a downward movement on equities in the context of tightening monetary policies, particularly in the United States.
According to the latest Fed minutes, the US economy would be robust enough to withstand rapid monetary tightening, which means that rate hikes could accelerate in the coming months.
Beyond the evolution of the war in Ukraine, the declarations of the central bankers should therefore constitute an important point of attention for the markets over the coming weeks.
These elements should provide investors with the opportunity to assess the ability of companies to cope with the new inflationary environment, both in terms of margin and growth.
Some speakers are also worried about the results of the French presidential election and the tighter-than-expected duel that is looming between Emmanuel Macron and Marine Le Pen.
‘While Macron’s lead (28%) ahead of Le Pen (24%) at the end of the first round is greater than that of 2017, the polls point to a narrower score in the second round (53 %-47%)’, underline this morning the strategists of Danske Bank.
However, the ‘suspense’ seems very thin as Marine Le Pen’s voice reserves seem limited: the so-called ‘extreme’ formations (left and right) excommunicating each other, in an apparently irreconcilable way.
In the news of French companies, ‘luxury’ weighs on the trend (around -3% on Hermès and Kering and -1.9% on LVMH) while the ‘lockdowns’ in China mentioned above are taking on worrying proportions.
The M6 Group and Altice Media announced on Friday evening that they had signed the contract for the sale of the 6ter channel from the first to the second.
In addition, the TF1 Group and the Altice Group announced on Friday evening the signing of agreements relating to the sale of the TFX channel to the Altice Group.
As part of its withdrawal from Russia, Societe Generale announces the signing of an agreement to sell its entire stake in Rosbank as well as its insurance subsidiaries in Russia to Interros Capital, Rosbank’s previous shareholder.
Finally, Saint-Gobain announced an investment of 32 million dollars for its CertainTeed plant in California in the United States. The group will increase production capacity by 13% and reduce the carbon footprint of its insulation factory.
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