(Boursier.com) – The CAC 40, which rose above 6,300 points thanks to a gain of more than 1% at noon, finally recovered only 0.2% at the close at 6,285 points. The People’s Bank of China’s announcement of a 15 basis point cut in one of its main policy rates last night, a further stimulus to the world’s second-largest economy, was generally welcomed by markets . This is indeed the largest rate cut in China since the overhaul of the central bank’s interest rate system in 2019, proof that the Chinese authorities intend to tackle the subject of support for growth head on. …
Still, in the afternoon, Wall Street again sent signs of great nervousness by continuing its corrective movement, enough to curb the rebound in European markets. A barrel of WTI crude stabilizes at around $110, while an ounce of gold remains at $1,835. The dollar index advanced 0.3% against a basket of currencies.
ECO AND CURRENCIES
The pervasive negativism surrounding stocks and accompanying recession fears sparked a flurry of comments from strategists at major financial institutions, discussing some of the additional downside risks to the market. Deutsche Bank estimated that if we slipped into recession immediately, they expected the market to correct well beyond the upper half of the historical range, given the initial stock market overvaluation. The German bank thus evokes the possibility of a fall of 35 to 40%, that is to say a broad index S&P 500 of return towards the 3000. The firm currently expects that the S&P price at least an average fall of recession of 24%, implying an S&P near 3650. Bank of America, for its part, believes that the worst-case scenario of stagflation involves an S&P bottom at 3200, which would reflect a typical recessionary ‘draw’ of 33% from peak to trough. Morgan Stanley, which has been one of the more pessimistic brokers so far, noted that the bear market would not be over until valuations fall to levels (multiples of 14-15x) that take into account the expected declines in earnings.
In short, banks and brokers are waking up late, while the American market has already largely corrected. However, it is always worth recalling historical bear market data, as concerns about an impending recession grow and the Fed has virtually no room to maneuver given the very high level of inflation. 68% of executives fear Fed tightening will trigger some form of recession, according to the Conference Board. The markets already seem to have greatly anticipated this weakness. Goldman Sachs observes that the S&P is now down about 18% from its highs, compared to an average contraction of 24% in 12 recessions since World War II (Bloomberg data). An unprecedented drop of around 5% in S&P dividends is also possible in 2023. JP Morgan’s Marko Kolanovic, a strategist known for his usually particularly bullish positions, does not see a recession this year, thanks to resilient consumer activity and monetary support from China…
claranova : rises by 8%, followed by Vallourec which takes up 7% with Antin.
Atos : +5% with Technicolor (+4%) and Odet with Moncey
Valeo picks up 3% in the automotive sector followed by Mersen, Covivio and Veolia (+2.5%)
Assystem : +2.5% with Boiron, Thermador, BioMerieux
Sanofi : +2% with Guillemot, Tikehau, GTT, Faurecia, Plastic Omnium, Getlink, Faurecia
Ruby : +1.5% with Accor, Navya, Synergie, JC Decaux
Air France-KLM : +1%. Following the announcement, during the presentation of the 2021 annual results, of the second stage of measures to strengthen its equity, Air France-KLM announced today that it has entered into exclusive discussions with Apollo Global Management regarding the injection of 500 million euros of capital into an operating subsidiary of Air France, owner of a fleet of Air France spare engines dedicated to its engineering and maintenance activity. The proceeds of the transaction would enable Air France-KLM and Air France to partially repay the perpetual obligations of the French State, in accordance with the European Commission’s “Temporary Framework for State Aid Measures” aimed at supporting the economy in the current context of the Covid-19 epidemic”, and would also facilitate the financing of the future acquisition of spare engines necessary for the ongoing renewal of the Air France aircraft fleet.
The structure will not result in any operational and social changes. Therefore, there will be no change in the way spare engines are used, nor any impact on Air France or Air France-KLM employee contracts.
This capital would be recognized as equity under IFRS, which would strengthen the balance sheet of Air France-KLM and Air France.
EDF (+1%) announced that it had finalized the revision of the timetable and the cost of the construction of the two nuclear reactors at Hinkley Point C, in Great Britain. In a press release, the group indicated that the start of the electricity production of unit 1 was now planned for June 2027, while the risk of postponing the delivery of the two units is estimated at 15 months assuming the absence of a new pandemic wave and the additional effect of the war in Ukraine.
P&V : -8% followed by Nanobiotix (-4%) with Ateme and Coface (-3.5%) and Showroomprivé.
rally : -2.5% with SQLI
Hermes : -2% with Dior and LVMH with Trigano and MdM
Elior : -1.5% with Carrefour, Infotel, Genfit, Scor, STM, Vilmorin, CGG, Saint-Gobain and Kering.