“Catapult” effect on the Paris Stock Exchange! The Cac 40, which was content to nibble on a few fractions until the middle of the afternoon, suddenly took off, reacting to a statistic on American real estate which, however, in recent months has left operators unmoved .
For the first time, home prices as calculated by the S&P CoreLogic Case-Shiller Index fell 1.3% in the 20 major cities surveyed month over month in August. Even if they remain higher still much higher than those of a year ago. It’s their biggest drop since 2009… In detail, San Francisco, Seattle and San Diego posted the biggest month-over-month declines, down 4.3%, 3.9% and 2 .8%, respectively. Over one year, the rise in house prices is thus reduced from 15.6% to 13.1%, the largest difference observed during these 35 years of statistical history, underlines Diana Olick for CNBC.
A delayed effect on inflation
For Bill Adams, economist at Comerica, whose remarks are also relayed by the American channel, the correction in real estate prices will constitute a ” big brake on GDP in 2023, which is likely to slow inflation. He expects real residential investment to fall 18% in 2023 from this year. ” Real estate prices feed through to housing costs in inflation indices that the Fed targets with a multi-quarter lag, so the drop in prices in mid-2022 will start to slow inflation in 2023 “says Bill Adams.
That was all it took for investors to judge that the multiple tightening of the screws operated by the US Federal Reserve was beginning to bear fruit, which would gradually release the pressure on the equity markets. If it seems certain that the Fed will once again raise the rate of its Fed-funds by 75 basis points on November 2, the president of the San Francisco branch Mary Daly estimated at the end of last week that if high inflation made ” very difficult “a pause in monetary tightening,” it was time to start to discuss a slowdown. More precise, the wall street journal reported for its part that the central bank could discuss, at its next meeting, a reduction in the magnitude of the increase in the cost of money in December.
At the close, the Cac 40 jumped 1.94%, to 6,250.55 points, in a trading volume of 3.3 billion euros. In New York, the indices, including future were on the downside before the publication of the statistics, are clearly in the green. the Dow Jones takes 0.8%, the S&P500 advance of 1.2% and the Nasdaq Composite by 1.8%, a few hours before the presentation, by the two Gafam Microsoft and Alphabet, of their accounts for the third quarter. The yield on 10-year bonds fell 17 basis points to 4.06%.
Air Liquide star of the day
In Paris, announcements of quarterly turnover continued. In this exercise, it is Liquid air who came out the best. The action of the industrial gases group rose by more than 6%, by far at the head of the Cac 40. The activity increased by 8.3% on a comparable basis, that is to say excluding the exchange rate scope and, especially in the current context, energy prices, whose surge has been particularly well managed.
Excluding the flagship index, Interparfums jumped 11.3%. The perfume designer has raised its financial targets for 2022, after a rise in sales in the third quarter.
Conversely, Remy Cointreau lost 4.6%. The premium spirits group expects sales and profit growth to slow as consumption returns to normal after two years exceptional “.