The attempt to rebound again failed on the Paris Stock Exchange, the market reacting to the stronger than expected rise in consumer prices in the United States in September. The latter increased by 0.4% over one month, twice as much as expected, marking a clear acceleration after the 0.1% increase recorded in August. Over one year, the slowdown is also less marked than expected at 8.2%, after 8.3% and 8.1% expected, while in “core” data (excluding food and energy), the increase reached 6.6% year-on-year, a 40-year high, compared to 6.5% expected and 6.3% in August.
Shortly after 4 p.m., the Bedroom 40 lost 0.64% to 5,781.38 points in a business volume of 2 billion euros. In New York, the Dow Jones loses 0.58%, the Nasdaq Composite 1.35% and the S&P500 0.89%. For the record, the managers’ benchmark had fallen 4.32% on September 13, the date of the publication of the inflation figures for August, which had exceeded expectations.
” Despite all the signs of persisting high inflation in the consumer price statistics, some indices clearly point to disinflation everywhere else, notes Michael Pearce of Capital Economics. And to cite the fall in the price of used vehicles, as well as the lesser pressure on rental prices which also points to a strong moderation, in the long term, of the cost of housing, ” although the effect won’t really materialize until the first half of 2023. Until that appears in the consumer price statistics, the Fed will continue to be hawkish, and push for rate hikes fast. “, he nuances.
Where we talk again about 100 basis points
The hope of a change in the scale of the Fed’s rate hikes is now completely dismissed with the risk that a fourth consecutive mega-tightening will increase the pressure on an already struggling global economy. The probability of a 75 basis point tightening on Nov. 2 is now rated at 95.8%, down from 75.2% last week. That of an increase of 1 percentage point is estimated at 4.2%, against 0% last week and 15.3% a month ago, when the August CPI was published. On the bond market, the yield on the US 10-year bond rose back above 4%, against 3.90% yesterday evening.
Released yesterday, the “minutes” of the last meeting of the Fed’s monetary policy committee showed that several of its members insisted that “ the cost of an action that is too weak to lower inflation is probably higher than that of an action that is too strong “. The minutes also reveal that some officials are arguing for a slower pace of rate hikes, which caused a sudden but temporary jump on Wall Street yesterday.
Techs under pressure
At the European level, the technology Stoxx 600 fell 4.4%, in the wake of the 3% fall in the Philadelphia semiconductor index. In question, the lowering of the forecasts ofApplied Materials (-4.7% in New York) for the current quarter due to new restrictions on semiconductor exports to China. In Paris, STMicroelectronics gives up 3.5%. In Amsterdam, ASML loose 8.1% and ASM International 7.8%.
In view yesterday after LVMH quarterly, the luxury sector is also weighing on the trend, Hermes notably falling by 58%.
Conversely, TotalEnergies gains 2.3%. The International Energy Agency has warned that the reduction in production decided by OPEC + risks causing a surge in prices.
Also noteworthy was the increase in values linked to leisure travel (+0.8%), driven by IAG, the parent company of British Airways, which announced that the levels of its reservations remained solid despite the increase in the cost of life. Air France-KLM notably takes 6%.
Airbus takes 2.2%. Oddo BHF reiterated its opinion of “outperformance” to target 132 euros. Also on the buy side, Citi expects solid growth supported by deliveries and a favorable exchange rate effect on the occasion of the publication of quarterly reports on October 28. BofA (buy) anticipates margin expansion through volumes. The motorist Saffron rises for its part of 2.3%.
Excluding CAC 40, Vilmorin garners 2.3%. The seed company reported an increase in its gross operating surplus (Ebitda) to 92.1 million euros. For the 2022-2023 financial year, it expects like-for-like revenue growth of 6% to 8% and a current operating margin rate of at least 8%.
OVH drops 3.1% while Goldman Sachs remains seller of the stock with a price target reduced from 17 to 9 euros. Citi lowered its from 12 to 9 euros. Oddo BHF also downgraded Eramet (-3.9%) from “outperformance” to “neutral”.