(CercleFinance.com) – European markets owe a great deal to Wall Street, which turned the tide (after a bearish opening) and took sellers on the wrong foot, with the S&P500 rising from -0.7% to +0.1%.
The recovery of the Paris Stock Exchange is spectacular with a CAC40 going from -1.6% (5,975) to +0.2% (to 6,090), i.e. +115 Pts or +2% in almost a straight line, which is not not insignificant.
The stock market term for October had started on a note of heaviness which is a continuation of the month of September (approximately -7%): the CAC40 will therefore preserve the 6,000 and dissipate the stress which reigned this morning.
Reductions dominate in a market with no real selling pressure: less than 1.3 billion euros traded in 8 hours of quotation, for a 1st monthly session, and given the intraday volatility, it is quite singular… but British traders are on leave this Monday because of royal funeral and national day of mourning.
Caution prevails across the Atlantic two days before the US Federal Reserve’s monetary policy announcements: the Dow Jones, the Nasdaq and the S&P500 show differences of less than 0.2%.
The FED will once again find itself in the spotlight this week by holding, starting tomorrow, its two-day strategic committee, the conclusions of which are eagerly awaited by investors.
It seems understood for all analysts that a new turn of the screw is preparing, the question being simply whether it will be an increase of 75 or 100 basis points.
According to the CME Group’s ‘FedWatch’ barometer, traders today estimate the probability of a 75 basis point rise in key rates at the end of the meeting at 82% (18% for +100Pts whereas it was estimated at zero last Monday).
Jerome Powell’s statements at the end of the meeting may also strongly agitate the markets, especially if investors were to reveal the slightest sign invalidating their calendar.
The markets took a severe hit last week after the announcement of US inflation which fell only modestly to 8.3% in August, which leaves the Federal Reserve in the same state of alert.
The FOMC will probably prefer to limit itself to indicating that further substantial increases remain on the agenda for the following meetings in November and December.
Small reason for hope, expectations relating to the US seem to have ebbed in recent weeks, as illustrated by the latest available statistics.
The American consumer confidence index from the University of Michigan, published last Friday, showed that household inflation expectations over a one-year horizon had fallen to 4.6%, their highest low level in one year, thanks to the recent decline in energy prices
Despite a Chinese economy that still appears to be in difficulty and the persistent energy crisis in Europe, which pose growing risks to activity, the Fed could nevertheless succeed in orchestrating a soft landing, strategists believe.
According to this dream scenario, the Fed would manage to continue its ongoing monetary tightening, without, however, causing a more marked slowdown in growth than that observed in recent months.
This context would be ideal to allow the equity markets to regain some momentum on healthier fundamentals, at a time when the S&P 500 index has fallen by nearly 10% over the past month.
From a statistical point of view, it will be advisable to monitor, in the coming days, the latest indicators on the American real estate sector, which should show that the market correction is continuing.
In Europe, the preliminary estimates of the PMI surveys, which will be unveiled on Friday, will give a first indication of the business climate in September and the seriousness of a recessionary threat on the Old Continent, knowing that the services sector had shown serious signs of weakness in August.
No leading indicator is on the agenda today, so last week’s downtrend continues in bond markets with +2.5% on our OATs at 2.34%, +3Pts on Bunds at 1.794 % and +2pts on Italian BTPs at 4.06%.
US T-Bonds slipped a little more clearly with +5pts at 3.500%, the ‘1 year’ is now anchored beyond 4.000%.
Little movement on the foreign exchange market with -0.2% on the E/$ (between 0.9980 and parity 1/1): it is on the side of the ‘cryptos’ that volatility reappears, with -5 % on Bitcoin, in a very bad position under $18,500 this afternoon (beware of the breakout of $19,000), the same for Ethereum which is sinking below the support of $1,400.
On the side of values, Atos benefits from cheap takeovers (+6.6%).
Bouygues, RTL Group, TF1 and the M6 group put an end to the proposed merger of the TF1 and M6 groups, announced on May 17, 2021. This decision comes after the hearing of the parties by the College of the Competition Authority, the September 5 and 6.
Wendel’s Supervisory Board, which met on September 16, 2022 under the chairmanship of Nicolas ver Hulst, appointed Laurent Mignon as a member and Chairman of Wendel’s Management Board with effect no later than January 1, 2023. Wendel’s Management Board will then be composed of Laurent Mignon, its Chairman, and David Darmon, Chief Executive Officer and member of the Management Board since 2019.
TotalEnergies announces that it has approved the final investment decision (FID) for the Fenix gas development project, located 60 kilometers south of Argentina. The company, through its subsidiary Total Austral, operates the project with a 37.5% stake, in partnership with Wintershall DEA (37.5%) and Pan American Sur (25%).
Valneva unscrews -16% for a new base plus of 6.5E after breaking an IDT Biologika production agreement
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