It was the American rating that set the tone this week and allowed the Cac 40 to recover. But the volatility during the sessions shows that the concern is still there.
The Pont de l’Ascension is certainly responsible for the lack of volume on the Parisian market on Thursday and Friday, but the yoyo game that has been going on during the session since the start of the week has shown how nervous the market is, given lack of visibility around the world. The Chinese government’s “zero Covid” policy, which leads to supply disruptions, seems unwilling to end. The prospect of seeing Beijing take more steps to consolidate its growth, however, supported the trend, but concerns persisted.
Investors are wondering if the rise in rates in the United States will not end up slowing growth too much. The minutes of the Fed showed on Wednesday evening that, during the last meeting of its Monetary Policy Committee, the rise of 50 basis points in fed funds was decided unanimously. The next two divestments should result in similar increases. In Europe, the war in Ukraine continues. Alongside the atrocities committed by Russian troops on civilians, the shortage of many foodstuffs previously exported by Ukraine (particularly wheat) is making itself felt in the world. Oil prices remain high for geopolitical reasons, fueling inflation. At the highest for forty years, this price increase must also be fought on this side of the Atlantic. The European Central Bank is starting to send the message to stock markets that monetary policy cannot remain accommodative.
The Parisian coast has, more than usual, followed the American compass. Wall Street set the tone, and the rebound in the indices after seven weeks of decline for the S&P 500 enabled the Cac 40 to return to 6,500 points on Friday. However, we feel that the heart is not there and that the markets could start falling again at the slightest alert.
SYLVIE AUBERT