The Paris Stock Exchange is preparing to end the week at lows of more than six months, fears about the economy pushing investors to offload risky assets. The US Federal Reserve announced a third consecutive 75 basis point hike in key rates on Wednesday evening in an attempt to curb inflation, prompting other central banks to tighten monetary policy. Several strategists, including those at Goldman Sachs and Bank of America, have revised their forecasts for the European Stoxx 600 index down 5% over the past month and abandoned the idea of an end-of-season rally. year, based on the average of 16 estimates compiled by Bloomberg.
Shortly after 4 p.m., the Bedroom 40 fell 2.14% to 5,794.10 points after a floor at 5,765.65, unprecedented since early March. It thus returns to the “bear market” zone after a fall of more than 20% compared to its record of January 5. In New York, the Dow Jones loses 1.27% and the Nasdaq Composite 1.65%.
Private sector activity deteriorated further in September in the euro zone. Preliminary PMI indices released by S&P Global fell 1.6 points to 48.5 respectively in manufacturing and 0.9 points to 48.9 in services, marking 27-month and 19-month lows respectively. ” A recession in the euro zone is looming, as companies in the region have reported a deterioration in the economy as well as rising inflationary pressures, linked to soaring energy prices. writes Chris Williamson, chief economist at S&P Global.
US PMIs against the Fed
In the United States, the slowdown is less noticeable, which does not facilitate the task of the Fed, which is counting on the weakening of the economy to curb inflation. The same S&P Global PMI indices rose by 0.3 points to 51.8 for manufacturing industry, which remains in an expansion phase, and by 5.5 points to 49.2 in services, an improvement which surprised economists. The message from the Federal Reserve is clear: recession could well be the price to pay to regain control of inflation.
” The problem with this approach is that it has the undesirable side effect of forcing other central banks to try to keep pace in order to contain the inflationary shock caused by the surge in the dollar against their own currencies.s,” warns Michael Hewson, chief market analyst at CMC Markets. The dollar index reached a new record against a basket of six other currencies: the euro, the yen, the pound sterling, the Canadian dollar, the Swiss franc and the Swedish krona.
M6 arouses covetousness
TotalEnergies fell 5% in the wake of oil prices, on track to align a fourth consecutive week of decline as the movement of monetary tightening around the world increases the risk of falling demand.
Banks are weighed down by Credit Suisse, which hit an all-time low in Zurich after testing investors for a capital raise, sources quoted by Reuters said. In Paris, Societe Generale loose 3.9%, BNP Paribas 3% and Agricultural credit 2.7%.
Airbus resists (-0.2%). As part of its investor day, the aircraft manufacturer confirmed its objective of delivering around 700 aircraft this year despite the difficulties encountered in its supply chain. He also says he is committed to strengthening shareholder returns.
M6 jumped 8.2% following an article by La Stampa according to which the media group MediaforEurope, of Silvio Berlusconi, will present a non-binding offer in cash for the 48.3% of the capital of the French channel put up for sale by Bertelsmann.
Nexity gives up 4.6%. Oddo BHF downgraded the title of the real estate developer from “neutral” to “underperformance”.
Neoen fall of 7.6%, weighed down by a note from Citi, which went from “neutral” to “sell” on the title. The same intermediary started monitoring Veolia Environment (-2.5%) to “neutral” to target 21 euros.