The Paris Stock Exchange erased its gains from the day before and Wall Street fell at the opening. Risk aversion is coming back to haunt the markets in an environment of central bank monetary policy tightening against a backdrop of soaring prices in Europe and the United States. Tensions in the bond market are weighing on technology stocks, with the associated Stoxx 600 index signing the second largest sectoral decline in Europe (-1.7%), behind distribution (-2.7%).
The World Bank has also cast a chill by lowering its forecast for global growth to 2.9% this year, against 4.1% previously, and warned of the risk of stagflation. The institution further indicates that the invasion of Ukraine by Russia, in addition to the imbalances caused by the health crisis, threatened many countries with recession.
Around 4 p.m., the Bedroom 40 lost 1.19% to 6,470.69 points in a limited business volume of 1.2 billion euros. In New York, the Dow Jones plaice by 0.60% and the Nasdaq Composite by 0.52%. Target decreases by %. The retail group, which is seeking to reduce inventory levels through promotions and order cancellations, lowered its operating profit forecast for the current quarter for the second time in three weeks. Its competitors walmart and Costco yield respectively 2.3% and 1.6%.
Bank of Australia tightens by half a point
The yield on the 10-year US bond is stabilizing just below 3% after climbing back above that threshold on Monday for the first time since early May. Equity markets remain volatile and any attempt to rebound seems doomed due to fears that the rising cost of credit will affect corporate growth and profits. That of the German Bund of the same maturity, which serves as a benchmark in the euro zone, eased by 4 basis points to 1.2810%, while remaining thus in view of its highest levels since 2011.
The European Central Bank is expected to announce the end of its asset purchase program on Thursday and prepare markets for a rate hike in July. It will also present its new growth and inflation projections. The following day, investors will take notice of May inflation figures in the United States, ahead of a likely 50 basis point hike in Federal Reserve interest rates next week.
This morning, the Bank of Australia raised its main interest rate by 50 basis points, twice as much as expected, to 0.85%, at the same time carrying out its sharpest monetary tightening in 22 years. . The RBA is following in the footsteps of the Fed, the Bank of Canada and the Bank of New Zealand, which have carried out monetary tightening of the same magnitude.
Dassault Systèmes behind in the cloud?
Biggest drop in the Cac 40, Dassault Systems down 2.7%. Jefferies lowered its recommendation on the title of the 3D design assistance software publisher from “hold” to “underperform” and reduced its price target from 40 to 33 euros. For the broker, the group is lagging behind the sector in the shift to the cloud.
Hermes yields 2.2% while UBS lowered its target price on the value of 1,404 to 1,185 euros.
Valeo is stable. Valeo Siemens eAutomotive, the joint venture between the French automotive supplier and the German industrialist, has announced that it has exceeded its target of 4 billion euros in order intake for high-voltage electrification technologies over the 2021-2022 period.
CGG advance of 6.7% while Societe Generale raised its recommendation on the title of the oil services group from “hold” to “buy”.
Technip Energies takes 4.2%. The engineering group for the energy industry has announced that it has won a feasibility study contract with the French company Viridian Lithium for the construction of a lithium refining and conversion plant in France. The financial aspect of the contract was not disclosed.
Casino loose 6.7%. The distribution group is struggling to find a buyer for its subsidiary specializing in the production of renewable energy GreenYellow, reports BFM Business.