(CercleFinance.com) – The Paris Stock Exchange (-1.1% towards 6,955) is undergoing a correction which is undermining the main medium-term supports: the CAC40, which is sinking clearly below 7,000, will validate this evening, barring a saving rebound of last minute, the break of the support of 6,980.
The Euro-Stoxx50 also drops -1.2% and threatens to fall below 4,100 Points.
On Wall Street, the S&P500 and the Nasdaq only lost -0.7% and showed themselves to be more resilient than the European indices, the Dow Jones even had the luxury of a gain of +0.05%, despite a ‘ VIX’ which jumped +7.5% towards 19.2.
The ‘VIX’ also finds itself in a rather delicate position because beyond 20, the stock market climate would radically shift into ‘risk-off’.
Investors are not taking into account the good Chinese growth figures: they are not enough to counterbalance the persistent tensions in the Middle East, while the meetings between Joe Biden, the Jordanian sovereign and the Egyptian President on the subject of the Israel/Gaza conflict -Hamas were canceled by the latter, ruining hopes for peace.
Investors should have been reassured last night by the announcement of stronger economic growth than expected in China, with GDP coming in at +4.9% in the third quarter according to the State Bureau of Statistics (BES), but the Shanghai and Shenzhen stock markets ended in sharp decline.
The trend is therefore weighed down by geopolitical tensions in the Middle East, where the explosion of a hospital in the Gaza Strip – each side blames each other but Joe Biden points to Hamas – left hundreds of people dead.
Some observers fear that this strike could compromise diplomatic efforts made by the United States to contain the conflict between Israel and Hamas, which were favorably received by the markets.
These tensions also favor safe haven assets, such as gold, which rose to 1,945 dollars per ounce, a one-month high.
The bond market – on the other hand – paradoxically does not serve as a refuge since the yield on 10-year US Treasury bonds jumped by +7 points to 4.92E (5,000% is now very close).
The tension is also palpable in Europe with +5.2 Points on our OATs at 3.562%, +4.5 Points base on the Bunds at 2.927% (3,000% is in sight)… and Italian BTPs show +9, 8Pts at 4.998% (the 5% test is imminent).
On the quarterly side, investors will follow the highly anticipated post-closing publications from Tesla and Netflix in the evening.
In terms of macroeconomic indicators, investors took note of the latest inflation figures in the euro zone this morning.
The euro zone’s annual inflation rate stood at 4.3% in September 2023, compared to 5.2% in August according to Eurostat. A year earlier, it was 9.9%. The European Union’s annual inflation rate stood at 4.9% in September 2023, compared to 5.9% in August. A year earlier, it was 10.9%.
Across the Atlantic, housing starts rebounded in September in the United States, which suggests that the American economy remains well oriented despite the impact of the rise in interest rates.
According to data released Wednesday by the Commerce Department, housing starts increased 7% last month on a seasonally adjusted basis, at an annualized rate of nearly 1.36 million.
On an annual basis, that is to say compared to September 2022, construction starts show a decrease of 7.2%.
Single-detached home starts – which make up the largest portion of the residential real estate market – rose 3.2% to 963,000.
On the other hand, the number of building permits fell by 4.4% to reach an annualized rate of 1.47 million, where the consensus expected 1.46 million.
For their part, crude oil prices are rising again following the attack on the Ahli Arab hospital, which is fueling concerns about the region’s prospects.
‘Oil could increase sustainably if the United States decides to strengthen sanctions against Iran – a country suspected of having approved Hamas attacks’, recall the teams at DeftHedge, a management specialist. foreign exchange and raw materials risk.
Brent climbed 1.5% to $91.5 per barrel while American light crude (WTI) jumped more than 2% to $88.5.
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