The Paris Stock Exchange is moving to lows of more than six months, the specter of recession causing a wave of releases on risky assets. The US Federal Reserve announced Wednesday evening a third consecutive increase of 75 basis points in its key rates in an attempt to curb inflation at the risk of weighing down its economy. Many central banks had no choice but to follow suit. The continued contraction of activity in the euro zone is also confirming fears of a deterioration in the European economy.
Around 2:30 p.m., the Bedroom 40 fell 1.94% to 5,803.76 points after a floor at 5,768.78, unprecedented since early March. At the same time, it returned to the “bear market” zone after a fall of more than 20% compared to its record of January 5. It thus imitates the New York S&P 500, for which Goldman Sachs lowered its target to 3,600 points at the end of the year, against 4,300 previously. The contracts future on American indices yield more than 1%.
The preliminary September PMI indices published by S&P Global for the euro zone fell by 1.6 points to 48.5 in manufacturing and by 0.9 points to 48.9 in services respectively, marking lows of 27 and 19 months respectively. The 50-point threshold marks the boundary between growth and contraction in activity. ” 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. And to add that ” monetary policy makers face an increasingly difficult challenge: controlling inflation while avoiding a hard landing in the economy “.
The Fed imposes its tempo
For those who still doubt it, the Federal Reserve sent a message that could not be clearer. It is ready to tolerate a recession as 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 Bank of England, the Bank of Norway and the Swiss National Bank therefore raised their interest rates yesterday, while the Bank of Japan (BoJ) passed its turn. On the other hand, it intervened on the foreign exchange market for the first time since 1998, to stop the fall of the yen. The latter recovered somewhat against the dollar. But this intervention does not address the root cause of the Japanese currency’s weakness: the gaping gap between the BoJ’s ultra-accommodative policy and that of the other central banks.
M6 coveted by Berlusconi
TotalEnergies fell 2.8% 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 3.2%, Agricultural credit and BNP Paribas more than 2%.
Airbus resists by maintaining balance. 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 7.4% 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 4.3%. Oddo BHF downgraded the title of the real estate developer from “neutral” to “underperformance”.
Neoen fall of 7.1%, weighed down by a note from Citi, which went from “neutral” to “sell” on the title. The same intermediary started monitoring Veolia Environment (-3.1%) to “neutral” to target 21 euros.