The Paris Stock Exchange remains on course, boosted by the good performance of Wall Street in the first exchanges, while the contracts future hinted at a decline. The market also welcomes the monthly decline in real estate prices in the United States, the most marked since 2009, a signal for the Fed that could slow down, which leads to a further decline in bond yields. Investors are also trying to analyze the many corporate publications, in Europe and the United States, before the appearance this evening of the heavyweights of American “tech”, which should be a test for the recent rally. Alphabet and Microsoft will release their quarterly accounts after the close of Wall Street. Meta will follow tomorrow, then Amazon and Apple on Thursday. The Gafams weigh for around 25% of the S&P 500 index.
In Germany, the largest economy in the euro zone, the business climate deteriorated less than expected in October, the index calculated by the Ifo institute coming out at 84.3 points, against 83.5 expected and 84.4 in September. However, it tends to confirm that Germany is rapidly approaching a recession, which threatens to be the deepest among the countries of the euro zone.
Around 4 p.m., the Bedroom 40 increased by 1.28% to 6,209.62 points, after a peak at 6,211.66 (+ 1.30%), unprecedented since September 15, in a business volume of around 1.5 billion euros. In New York, the Dow Jones gains 0.55% and the Nasdaq Composite 1.48% the day after a rise of around 1% on Wall Street yesterday. Coca Cola increased by 1.3%, after having raised its forecasts for profit and annual turnover. General Motorswhich confirmed its objectives, gained 1.6% and UPSwhich exceeded expectations takes 3.6%, while 3Mwhich lowered its annual forecasts, lost nearly 1%.
Difficult trading conditions
Market movements are particularly erratic after declines of around 20% since the start of the year in Europe, as in the United States. ” The market has become accustomed to price volatility, to which it is almost desensitizedanalyzes Jeff O’Connor of Liquidnet. Violent movements that make trading conditions all the more difficult “, he adds.
Investors have the feeling that the Fed will eventually slow the pace of its rate hikes in view of the deterioration of macroeconomic indicators, which show that the recent monetary tightening is starting to weigh on activity and even on the performance of companies. ” We have seen throughout the year that the risk premium on equities tends to compressobserves Christian Muller-Glissmann, head of portfolio management at Goldman Sachs, on Bloomberg TV. Which makes you more vulnerable if you disappoint in terms of growth, cash flow etc. It hasn’t really happened yet, but all the leading indicators point to risks in this direction “, he warns.
The Fed ready to slow down?
The market continues to expect a 75 basis point hike in the Fed funds rate on November 2, but expectations for a move of the same magnitude in December tend to diminish. The European Central Bank is also expected to raise rates by 75 basis points on Thursday, despite the prospect of a eurozone recession.
On the bond market, the yield on the US 10-year bond eased by 15 basis points to 4.0781%. Those of German and French bonds experienced similar variations. That of the British gilt of the same maturity is also decreasing, after the official appointment of Rishi Sunak as Prime Minister.
He pledged to restore economic stability and confidence ” in front of the ” deep economic crisis ” that crosses the country and warned on “ the tough decisions ahead ” to fix ” Errors committed by Liz Truss. Tory MPs are expecting him to confirm Jeremy Hunt, who worked to defeat Liz Truss’ ‘mini budget’, as Finance Minister ahead of the Budget presentation, scheduled for the next week.
Air Liquide and Interparfums in the spotlight
A fact rare enough to be underlined, Liquid air leads the Cac 40 with a gain of 5.8%. The industrial gases specialist confirmed its outlook for 2022, after seeing its sales increase by 41.3% in the third quarter, thanks in particular to the rise in energy prices.
Interparfums jumps 10%. The luxury perfume maker has raised its financial targets for 2022, after a surge in sales in the third quarter.
Remy Cointreau down 6.7%. The premium spirits group expects sales and profit growth to slow as consumption returns to normal after two “exceptional” years.
Seb increased by 4.8%. The manufacturer of small household appliances has however lowered its forecasts for turnover and operating margin for the current financial year after suffering in the third quarter from a sharp decline in sales in its main markets in Europe.