The Paris Stock Exchange is down for the fourth session in a row, weakened by the renewed tensions between Russia and Ukraine, as well as by the feeling that central banks, still focused on inflationary tensions, will not let up. no pressure on interest rates. And this, at the risk of weakening the economy and the margins of companies with the approach of the results of the third quarter.
Mid-session, the Bedroom 40 lost 0.317% to 5,848.92 points in a business volume of 610 million euros. The contracts future on American indices yield between 0.2% and 0.5% on this Christopher Columbus Day, a holiday in the United States, even if Wall Street will be open. The US bond market, on the other hand, will be closed. On Friday, the S&P 500 fell 2.8% and the Nasdaq Composite 3.8%.
The Bank of England (BoE) announced this morning the doubling of the maximum amount of its daily purchases of long-term bonds in order to ensure a stop “ ordered of the emergency programme, totaling £65 billion, scheduled for October 14. However, this decision did not lead to an easing of British bond rates, nor to a rise in the pound sterling.
The Fed and US inflation in the crosshairs
Hopes of the Fed shifting towards a reduction in the magnitude of its rate hikes were undermined by the less marked than expected slowdown in job creations in the United States in September, especially that the unemployment rate fell by 0.2 points to 3.5%. Fed officials also hinted last week that they did not plan to scale back rate hikes until inflation showed some tangible sign of easing.
The US central bank will release the “minutes” of the latest FOMC meeting on Wednesday, a day before the consumer price statistic, which is expected to reflect a slight deceleration to 8.1% year on year in September, after 8.3 % in August, however, in “core” data (excluding food and energy), the increase should on the contrary mark an acceleration to 6.5% over one year, against 6.3% in August. The weekend will also be animated by the publication on Friday of the quarterly reports of the major American banks, which traditionally opens the earnings season in the United States.
For the time being, the market assesses the prospect of a 75 basis point rise in the Funds funds rate at the beginning of November at 80%, according to calculations by CME Group. A rise of this magnitude would be the fourth in a row.
Talks between Renault and Nissan
Renault increased by 4%. The French group and its Japanese partner Nissan Motor have announced that they are discussing new initiatives aimed at strengthening their alliance. The announcements come as sources have told the wall street journal that Nissan was pressuring Renault to sell part of its stake in the Japanese manufacturer. Nissan could also raise funds in this perspective, according to Reuters.
Defense stocks are sought after as multiple explosions were heard in central Kyiv and other cities across Ukraine this morning in response to the attack that damaged the bridge linking Crimea with Russia at the weekend and that Vladimir blames on Ukraine. Thales takes 0.8% and Dassault Aviation 1.5%.
Growth stocks, particularly luxury stocks, continue to decline. Kering, Hermes and LVMH lose more than 1%. The sector is particularly affected by the sharp rebound in Covid-19 infections in China during the holidays last week.
The techs are also folding in the wake of their Asian counterparts after Washington announced new restrictions on the sale of semiconductors to Chinese companies, including products made abroad with American equipment. STMicroelectronics decrease by 1% and Soitec by 0.5%.
Casino (-7%) hit a new historic low after Standard & Poor’s downgraded its credit rating from B+ to B-. The rating agency has also revised down its profitability estimates for the distribution group.
Finally, vinci earns 1.5%. Jefferies has started monitoring the construction group and “purchase” concessions to target 105 euros.