The Paris Stock Exchange fell sharply, thus interrupting a bullish series which propelled the Cac 40 to new historic highs materialized by a gain of 3.1% in three sessions. In question, the releases observed on Wall Street on Wednesday evening and in Asia this morning in reaction to the “hawkish” tone of the minutes of the last meeting of the Fed’s monetary policy committee, held in mid-December. .
The “minutes”, published last night, show that the members of the central bank are clearly engaged in the process of normalizing monetary policy. Many of them believe that at the current pace, the labor market will quickly approach full employment. Rate hikes are still on the agenda (three in 2022 according to the latest dot plot), but there was also talk of the Fed’s balance sheet, which exceeded $8.6 trillion a year. last year, i.e. almost 10 times the amount reached in December 2008.
Mid-morning, the Bedroom 40 lost 1.21%, to 7,286.94 points in a relatively substantial business volume of nearly 950 million euros.
Tech under pressure, Carrefour stands out
Investors are therefore refocusing on the prospect of interest rate hikes as the Fed has indicated that it should tighten its policy “ earlier or at a faster rate than envisaged by the committee in an attempt to stem inflationary pressures. In the bond market; the yield on the 10-year US bond tightened by more than 2 basis points to 1.7273%. Growth stocks, technologies are logically paying the price. Capgemini thus loses 3.7%, Dassault Systems 2.6% and Teleperformance 2.7%. At the European level, the technology Stoxx 600 fell 2.5% and posted the largest sectoral drop. Luxury players, which represent a quarter of the capitalization of the flagship index, also weigh, with declines of 1.7% to 2.5% for LVMH, Hermes, Kering and L’Oreal. EssilorLuxottica also gives up almost 3%.
In contrast, crossroads takes another 4.8%, still driven by information from the Bloomberg agency, Wednesday afternoon, evoking renewed interest from its competitor Auchan for a merger.
A larger balance sheet than in 2014
If no decision has yet been made, it might be appropriate to start shrinking the size of the Federal Reserve’s balance sheet relatively soon after you start raising the fed funds rate “, judge the members of the Federal Reserve. Either way, and given the size of the institution’s balance sheet, its deflation will be faster than in the past.
” With the balance sheet now much bigger than it was in 2014, when it peaked earlier, and economic conditions much stronger, it makes sense that quantitative tightening would be faster. “Judge Paul Ashworth, Chief Economist United States for Capital Economics.
Many statistics are on the agenda for the day. In Europe, we will mainly watch the inflation figures in Germany for the month of December. In the United States, it will be necessary to analyze in turn the evolution of weekly jobless claims, the trade balance for November, durable goods orders for the same period and the ISM index of purchasing managers in the services sector for December. .
Meanwhile, the Caixin PMI of services purchasing managers improved in China last month, coming out above expectations at 53.1 points, against 51.5 estimated by the consensus and 52.1 in November.
ALD on the offensive in the Netherlands
In business news, Sodexo (-0.5%) recorded an 18.8% increase in its turnover in the first quarter of its 2021-2022 financial year, for which it confirms its forecasts: growth of 15% to 18% in invoicing at scope and constant exchange rates, for an operating margin close to 5% at comparable currencies, an improvement of 1.7 percentage points over one year.
ALD gained almost 6% and took the lead in the SRD. The Societe Generale subsidiary in long-term vehicle financing plans to acquire its Dutch competitor LeasePlan for an amount of 4.9 billion euros.
Conversely, Coface loose 9.6% while Natixis sold its entire 10% stake for 174 million euros, or 11.55 euros per share.