(Boursier.com) — The CAC40 had yet another turbulent week against a backdrop of high volatility. Over 5 days, the Paris star index finally rose by 1%, to 5,931 points. Symbol of this great nervousness, the weekend saw the stock market indices panic after a disappointing inflation indicator in the United States on Thursday, before bouncing on medium-term technical support and radical budgetary decisions from Great Britain. Brittany where the Minister of Finance was brutally forced to resign…
Tensions linked to the war in Ukraine, inflation and the rise in interest rates… All of these factors have prompted the International Monetary Fund to revise its global growth forecasts downwards. “The three largest economies, the United States, China and the euro zone, will continue to stall,” said its chief economist, Pierre-Olivier Gourinchas. “In short, the worst is yet to come and for many people 2023 will be experienced as a recession.” IMF expects global gross domestic product (GDP) growth to slow to 2.7% next yearcompared to 2.9% expected in July, due to the impact of the rise in rates on the American economy, the surge in gas prices in Europe and the persistence in China of health restrictions such as difficulties in real estate.
For this year, the organization maintained its forecast at 3.2%, with better-than-expected growth in Europe making it possible to offset the American slowdown. But this figure reflects a marked slowdown after the 6% rebound from which the world economy benefited last year…
Central banks up against the wall
In the United States, growth is expected to be only 1.6% this year, 0.7 percentage points less than expected in July, after the unexpected contraction in GDP in the second quarter. For 2023, the Fund is still expecting growth of only 1%…
The IMF explained that its forecasts remained dependent on the ability of central banks to fight inflation while avoiding an excessive tightening of monetary policies which could precipitate the world economy into “an unnecessary deep recession”, disrupt markets financial resources and to penalize developing countries. However, he recognizes that the fight against inflation remains the top priority. “The hard-earned credibility of central banks would be undermined if they made another error of judgment on the stubborn persistence of inflation,” said Pierre-Olivier Gourinchas… “This would prove even more damaging for future macroeconomic stability. ” The US Federal Reserve and the European Central Bank (ECB) have long considered the acceleration of inflation to be a “transitory” phenomenon, which has delayed the start of the rise in interest rates.
dark scenario
The IMF also estimates that global inflation should have peaked at 9.5% in the third quarter of this year and will drop to 4.7% by the end of 2023. It also points out that a “plausible combination of shocks” including a 30% jump in oil prices could cause growth to fall to 1.0% next year, a level at which real household incomes would decline.
This “gloomy scenario” also includes a marked decline in real estate investments in China, a significant tightening of financial conditions linked to sharp depreciations in emerging currencies and persistent tensions in the labor markets. The IMF estimates at 25% the probability that world growth will fall below 2% next year, a situation that has occurred only five times since 1970, and at 10% that of a contraction in world GDP. ..
In the United States, the real-time FedWatch tool now gives a 98% probability of a further 75 basis point rate hike by the Fed on November 2, at the end of the next meeting, which would mark the fourth consecutive “oversized” rate hike and would take the fed funds rate to between 3.75 and 4%. The hypothesis of a comparable rate increase on December 14 at the end of the last meeting of the year retains the majority of votes. The consumer price index in the United States for the month of September 2022 therefore rose by 0.4% compared to the previous month, against a FactSet consensus of 0.2%. Year on year, the price index climbed 8.2%, against 8.1% market consensus and 8.3% a month earlier. Excluding food and energy, the consumer price index increased by 0.6% compared to the previous month, against 0.4% consensus. Its increase over one year is 6.6% against 6.5% consensus. Thus, US inflation excluding food and energy hits a 40-year high…
Something to darken the horizon of investors again as the quarterly season is about to begin. And the first signs are hardly encouraging, especially on the side of tech and chip manufacturers with two ‘warnings’ signed AMD and Samsung Electronics… On currencies, the euro ends at 0.97/$. Oil is at $91.60 Brent and Bitcoin at $19,100.
VALUES
The group Aures rises 15% with other mid-caps like Catana (+14%) and Nacon’ +13%) followed by Believe (+10%)
SMCP : +9% followed by Elior, Guerbet, Groupe Gorgé, followed by Air France KLM.
Thermador rises by 8% with LFE and Showroomprivé
Faurecia : +7% with Beneteau, Bonduelle (+6%) and Séché
Virbac rebounded by 5% with Orpea, Sword, Bic, Genfit, MdM, Imerys, Klepierre and Mercialys
Alstom regains 4.5% with JC Decaux, Manitou, Airbus, Trigano, Essilor and Interparfums
On the downside, Bantia fell by 15% followed by Navya (-12%) and Eramet
claranova : -9% with LNA (-8%) and Inventiva
Ubisoft loses 7% followed by CGG and Bastide (-5.5%)
Vallourec : -4.5% with LDC, Vicat
M6 : -3.5% with Argan, Icade, Burelle, Eutelsat
Casino : -3% with Renault, STM and Thales