Paris, like Wall Street, experienced a weekend rally, returning to the 6,000 point threshold. Basically, many areas of concern remain, including inflation and recession.
The word is out: “recession”. The term, which was already back in the vocabulary of economists, is now in the mouths of central bankers. During his hearing before the Senate on Wednesday, the Chairman of the US Federal Reserve, Jerome Powell, admitted that the rise in interest rates, intended to counter inflation, is likely to cause a recession. “It’s not the intended effect at all, but it’s certainly a possibility,” he said. This statement cast a chill, making Europe bend more than the United States. Commodities (copper, iron ore, oil, etc.) were also under pressure. Thursday, the hesitation was again in order. But while Paris extended its decline from the day before, Wall Street moved forward, with the Nasdaq Composite in the lead. Heard this time before the House of Representatives, the boss of the Fed recalled his “unconditional” desire to curb the rise in prices, while specifying that he expected an acceleration of activity in the second half of the year in UNITED STATES. In the meantime, the latest statistics give credence to the scenario of a slowdown, whether in terms of the business climate in Germany, the confidence of American households or the PMI surveys on both sides of the Atlantic. “Inflation has an impact on production. The contraction of the new orders index means that the July figures will be even worse”, analyzes John Plassard, at Mirabaud. Bad news can be good news – “bad news is good news”, in the jargon – the market saw in these data the hope that central banks are less aggressive. This brought the markets on Friday, the Cac 40 gaining 3.23%, and the Dow Jones, 2% (at 5 p.m.). Thanks to this weekend rally, the Parisian index posted a weekly gain of 3.24%, the first in a month. It has thus again crossed the threshold of 6,000 points.
SYLVIE AUBERT