Same causes, same effects. At the end of another complicated session, the star index of the Paris Stock Exchange, the Bedroom 40, fell 0.13% to 5,833.20 points, after a low of 5,770.48 points, marking its fifth consecutive day of decline. The volume of transactions totaled 2.6 billion euros. across the Atlantic, the Dow Jones rebounds by 0.5%, after four sessions of contraction, while the Nasdaq Composite technological coloring continues its decline (-0.6%), penalized by the prospect of a continued toughening of the tone of the American Federal Reserve (Fed). September’s U.S. jobs numbers, released on Friday, gave proponents of an offensive line and further interest rate hikes a further boost. Fed-funds.
” The worse is yet to come »
At this stage, none of the institution’s officials has made a speech suggesting a pause in the monetary cycle, despite the risks weighing on the economy. Worse, two of them, Lael Brainard, the vice-chairman of the Fed, and Charles Evans, of the Chicago office, gave unreassuring speeches, the first believing that the policy of the Fed must remain restrictive, surely throughout 2023, the second judging difficult to avoid a recession. A diagnosis shared by Jamie Dimon. The boss of the powerful American bank JPMorgan considers likely a recession within six to nine months in the United Statesas well as an additional 20% drop in the S&P 500, depending on whether or not the Fed can stage a soft landing.
” The worse is yet to come “, also confirmed the International Monetary Fund (IMF) during the presentation of its new economic forecasts, this Tuesday. Global growth is expected to be limited to 2.7% in 2023, 0.2 percentage point lower than July estimates and 0.5 percentage point lower than in 2022 (3.2%). It would be the weakest performance in the last two decades, except for the financial crisis of 2008 and the pandemic of 2020. A third of the world economy could experience a recession next year, details the IMF, listing, among the causes, the rise in rates in the United States, the surge in gas prices in Europe and the persistence of health restrictions and the difficulties of the real estate sector in China.
The rest of the week will be decisive, in particular Thursday’s session. That day will be unveiled the consumer price index in September in the United States. A figure above the 8.3% recorded in August is likely to shock the markets. Thursday might even be a new day at -5% warn members of the JPMorgan trading desk, recalling that the S&P 500 fell 4.3% on September 13, the day inflation figures were announced in August. However, this is the most pessimistic scenario, insofar as the bank’s economists expect inflation to slow to 8.1% over one year.
ArcelorMittal and Sanofi are doing the splits
On the securities front, banks (BNP Paribas, Agricultural credit and Societe Generale) lost ground, between 0.88% and 2.88%, held back by fears about the economy. In the technology compartment, STMicroelectronics dropped 3.08%, in last position of the Cac 40. ArcelorMittal and Capgemini fell victim to sell-offs (-1.06% and -1.50% respectively at the close) after being removed from the “Focus Europe” list of Jefferies’ favorite European stocks.
Renault dropped 2.2%. Its partner, the Japanese Nissan, announced the sale to the Russian public group NAMI of its assets in the country., an operation that will result in an exceptional loss of approximately 100 billion yen (707 million euros). Nissan will retain a buyout option for six years.
Conversely, Nexity appreciated by 0.32% following a note from Barclays, which started the coverage of the real estate developer to “overweight”. Finally, Sanofiat the top of the Cac 40, took 2.16%. The pharmaceutical group has announced last-minute positive results for a phase 3 trial involving the experimental use of its drug Dupixent (dupilumab) in children aged 1 to 11 suffering from eosinophilic esophagitis.
CP