The Paris Stock Exchange aligns, this Wednesday, a fifth session of decline in a row. Today the Bedroom 40 lost 1.37% to 6,125.10 points, the lowest in just over a month. The Parisian index relapsed by 5% in August, thus wiping out its strong July rebound by more than half. Most of the relapse occurred in the last days of August. The mood clearly changed on the stock market from Friday when the largest central banks in the world, American and European, insisted, during the Jackson Hole symposium, on their determination to fight against inflation, even if it meant rushing the economies in recession by raising interest rates.
Fears of a contraction in the global economy drove oil prices back to around 95 dollars a barrel for Brent from the North Sea (-10 dollars in two days). TotalEnergies (-3.3%) marks the largest drop in the Cac 40.
Today, the latest inflation data provided another chill. In the euro zone, despite a good surprise on the French side (+6.5% over the year, slowing down compared to +6.8% in July and +6.7% expected), the increase in the price index at consumption reached 9.1% year on year in August, a new record and more than the 9% anticipated by the Bloomberg consensus or the 8.9% in July. Excluding food and energy, it came out at 4.3%, against 4.1% expected and 4% the previous month. For the first time, the prices of food, alcohol and tobacco show an increase of more than 10%.
75 basis points on September 8?
“These further increases in headline and underlying inflation in August and the likelihood that they will continue to rise will increase the pressure on the ECB to accelerate the pace of tightening,” analysis Jack Allen-Reynolds, at Capital Economics. The European Central Bank makes its monetary policy decision on September 8. Worryingly, “although business surveys show that supply chain problems have eased, core inflation for manufactured goods has accelerated from 4.5% to 5%”, continues Jack-Allen Reynolds. Inflation in services fell from 3.7% to 3.8%. “Before the end of the year, we expect headline inflation to reach 10%,” he concludes.
The other date of the day was American. Published in the early afternoon, two days before official figures from the Labor Department, job creation in the private sector fell short of expectations in August, at only 132,000, more than half as expected. (300,000 positions anticipated) and to be compared to 270,000 in July. “We could be at an inflection point, estimates the firm ADP, which carries out this study each month, moving from a ‘overpowered’ rhythm of hiring to something more normal. Our numbers suggest a move towards a more usual pace, perhaps as companies try to decipher the mixed signals from the economy. »
On Wall Street, the Dow Jones, S&P 500 and Nasdaq Composite are also trending lower. Contrary to the trend, Snap gains 8% while the company announced that it was going to lay off 20% of its workforce, which today amounts to more than 6,000 employees.