(CercleFinance.com) – After the tumult of the last few days, the Paris Stock Exchange is coming to its senses on Friday morning, a return to calm favored by the rather thin economic agenda that is looming in this last session of the week. The CAC 40 index advances by 0.9% to 5940 points.
The Parisian market, however, seems determined to move forward after having aligned seven out of eight downturns, in a context of monetary tightening by the major global banks.
As a reminder, soaring inflation in the United States prompted the Federal Reserve on Wednesday to raise its main interest rates by 75 basis points, a first since 1994.
Yesterday, the CAC 40 had further widened its losses (-2.5%) following the surprise announcement of a 50-point increase in the key rate of the Swiss National Bank (SNB), with other increases to follow.
Over the week as a whole, the Parisian index has so far fallen by more than 4%.
Faced with the proliferation of monetary tightening measures, which threaten to plunge the planet into recession, investors can no longer find a taste for risk.
Market participants are beginning to realize that the acceleration of the monetary tightening cycle is likely to have an impact on growth, first in the United States and then in the rest of the world.
While no asset class has been spared by the recent correction in the financial markets, the main warning signals undeniably come from the bond market.
The significant easing that is taking place this morning on the Treasuries market should, however, offer a semblance of calm to equities, even if concerns are far from being completely allayed.
Yields on US Treasuries are all starting to fall again, with the ten-year returning to around 3.30% after hitting 3.45% yesterday.
The two-year and the five-year are also falling back from their peaks the day before, confirming that it is now time to relax on the bond compartment.
The macroeconomic agenda looks slim today, with the publication of the final inflation figures in the eurozone, then industrial production and leading indicators from the Conference Board in the United States.
The session should also be marked by the expiration of many types of ‘futures’ and options contracts, a conjunction known as the ‘four witches’ which usually promotes trading volatility.
On the side of values, Oddo raises its advice on the title Air France-KLM, from ‘underperformance’ to ‘neutral’, while lowering its price target to 1.45 euros, against 4.4 euros previously.
‘ We are raising our estimates, especially for the 2022 financial year (+11% at the level of EBITDA and +9% vs consensus, EPS down following the capital increase), in order to integrate an improvement in yields at Q2 and Q3’, says the analyst.
Invest Securities confirms its neutral view on the stock. ‘While we believe that most of the derating is behind us, our updated objective at 32E (against 36E) does not offer any potential to go back to buying’.
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