The Paris Bourse lost ground on Thursday, thus interrupting a bullish series that 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 Wednesday evening and in Asia this morning in reaction to the surprisingly “hawkish” tone of the minutes of the last meeting of the monetary policy committee of the Fed, held in mid-December. The slight increase from 7,000 to 207,000 in weekly jobless claims, against 195,000 anticipated, does nothing to help matters. ” We are now entering a time when good data is bad because it fuels the Fed hawks, and bad data is also bad because it cannot fuel the Fed doves. », Said Ipek Ozkardeskaya, senior analyst at Swissquote this morning.
The “minutes”, released last night, show that members of the central bank intend to initiate the process of normalization of monetary policy. Several of them believe that at the current rate, 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 the Fed’s balance sheet was also discussed, which exceeded $ 8.6 trillion per year. last, almost 10 times the amount reached in December 2008.
Around 2:45 p.m., the Cac 40 loses 1.36%, to 7,275.70 points, in a relatively strong business volume of 1.83 billion euros. The contracts futures March on indices Dow jones and S&P 500 oscillate between equilibrium and a gain of 0.2%, while those on the Nasdaq 100 yield 0.4%.
Techs under pressure, speculation on Carrefour
Investors are therefore refocusing on the prospect of interest rate hikes while the Fed has indicated that it should tighten its policy ” earlier or at a faster rate That envisaged by the committee in order to try to contain inflationary pressures. In the bond market, the yield on the US 10-year bond climbed above 1.7% to 1.7291%, the highest since October. While the German Bund of the same maturity, which serves as a benchmark in the euro zone, flirts with 0% at -0.0970%. The 10-year Italian construction market is up 4 basis points to 1.2840% after peaking at 1.3149%, its highest level since July 2020.
Growth stocks, technologies are logically paying the price in the wake of the 3.3% decline in the Nasdaq Composite yesterday, the most marked since February 2021. Profit prospects seem less attractive when yields are higher and tend to be vulnerable when rates rise. Capgemini thus loses 5.4%, Dassault Systèmes 4.2% and Teleperformance 3.9%. At the European level, the Stoxx 600 of technology fell by 2.8% and shows the largest sectoral decline. Luxury players, which represent a quarter of the capitalization of the flagship index, also weighed in, with declines of 3% to 4% for LVMH, Hermes, Kering and L’Oreal. EssilorLuxottica also drops nearly 4.7%.
In contrast, crossroads takes another 3.8%. Auchan is considering a cash offer at 23.50 euros per share according to The echoes. For Bryan Garnier, such an amount should ” very probably »Be accepted by the shareholders. The Bloomberg agency reported, Wednesday afternoon, a 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 federal funds rates “, Judge the members of the Federal Reserve. In any event, and given the size of the institution’s balance sheet, its deflation will be faster than in the past.
” With a balance sheet now much larger than it was in 2014, during the previous peak, and much stronger economic conditions, it makes sense that quantitative tightening is faster. “, Judge Paul Ashworth, chief economist United States for Capital Economics.
ALD on the offensive in the Netherlands
Dassault Aviation gains 4.4%. The group announced that in 2021 it had received 49 orders for its Rafale fighter jet and 51 for its Falcon business jet. This figure does not include aircraft destined for the United Arab Emirates, with which Dassault Aviation signed a contract at the end of the year.
ALD gains 8.7% and takes the head of the SRD. The Societe Generale subsidiary in the long-term financing of vehicles plans to acquire its Dutch competitor LeasePlan for an amount of 4.9 billion euros. Societe Generale was up 1.9%.
Conversely, Coface loose 9.9% while Natixis sold all of its 10% stake for 174 million euros, or 11.55 euros per share.