The Paris Stock Exchange is about to align a fourth consecutive session of decline, the prospect of a new monetary tightening of magnitude on the part of the Fed raising fears of a slowdown in the economy. The earnings warning of FedEx, which plunged 22% in New York, also illustrates the deterioration in the economy. The express delivery giant dropped its annual forecast and announced cost-cutting measures, including hiring freezes and aircraft grounding.
The World Bank and the International Monetary Fund had previously warned of the risk of a global recession next year. Oil price volatility, caught between OPEC’s production cuts and demand concerns, is also weighing on the trend. The barrel of Brent from the North Sea thus recovered 1% to 91.38 dollars after a decline of 3.5% on Thursday.
Around 4:30 p.m., the Bedroom 40 lost 0.96% to 6,098.83 points in a business volume of 2.2 billion euros. In New York, the Dow Jones decrease of 0.67% and the S&P500 by 0.91%. On Thursday, the managers’ benchmark index closed at its lowest level since mid-July after posting its worst session in two years on Tuesday following the release of inflation figures last month.
Record inflation confirmed in the euro zone
On the macroeconomic front, Eurostat confirmed the 9.1% year-on-year increase in consumer prices in the euro zone in August, after 8.9% in July, and 4.6% excluding food and energy, after 4.8%. A surge in inflation that forced the ECB to raise its key rates by 75 basis points last week. In the United States, the consumer confidence index rose by 1.3 points to 59.5 in September according to the first estimate from the University of Michigan. The 1-year inflation expectations component came out at 4.6%, as expected, after 4.8% in August.
“Core” inflation remains at high levels across the Atlantic, both for consumer prices and for producer prices. On the other hand, the job market remains solid with a fifth straight drop in weekly jobless claims. The US Federal Reserve can therefore opt for another major increase in the credit blow without fear of causing an immediate hard landing for the economy. The market is pricing in a third straight 75 basis point Fed rate hike, not ruling out a 1 percentage point hike, a 20% probability, according to CME Group calculations based on contracts future on Fed funds.
Virbac and Vetoquinol sanctioned
Virbac fall of 9.7% despite rising half-year results. The veterinary laboratory has confirmed most of its outlook for 2022 while reducing its debt reduction target to around 30 million euros excluding dividends, at constant scope and exchange rates, against around 60 million previously.
Its competitor Vetoquinol plunged 16.5%, weighed down by its half-year accounts. Current operating income (before amortization of assets acquired) fell by 5.3%, to 51.5 million euros, representing a deterioration of more than 3 points in the margin. Net income contracted by almost 15%, to 21.4 million, i.e. profitability fell by almost half, to 7.9%.
GTT loses 3.7%. Engie has announced that it will sell GTT shares representing approximately 6% of the capital of the specialist in membranes intended for the transport of liquefied natural gas (LNG) via a placement with institutional investors at a price of 115.50 euros per share.
Agricultural credit down 3%. Societe Generale downgraded the title of the green bank from “buy” to “keep” and reduced its target price from 12 to 10.20 euros.
Gecina takes for its part 3.2%. JPMorgan raised its recommendation on the property from “neutral” to “overweight” and raised its target price from 11.80 to 13.20 euros.