The Paris Stock Exchange continued to decline, proving that the explosion on Wednesday, before the monetary decision of the Fed, was just a simple break. The US central bank has since announced a third consecutive increase of 75 basis points in its key rates, putting its counterparts around the world under pressure. The continued decline in activity in the euro zone, in services and in the manufacturing industry, also reinforces the fear of recession in the Old Continent.
Middle session, the Room 40 fell 1.25% to 5,844.29 points and returned to the “bear market” zone after falling more than 20% compared to its record on January 5. Thus it joined the New York S&P 500, where Goldman Sachs lowered the target of this at 3,600 points at the end of the year, against 4,300 before. The contracts in the future the American index yields between 0.8% and 1%.
The preliminary September PMI indices published by S&P Global for the euro zone fell by 1.6 points to 48.5 in manufacturing and by 0.9 points to 48.9 in services respectively, marking the lowest in 27 and 19 months respectively. The 50-point threshold marks the boundary between growth and decline activity. ” A recession in the euro zone is coming, as companies in the region report a deterioration in the economy as well as an increase in inflationary pressures, linked to rising energy prices. wrote Chris Williamson, chief economist at S&P Global. And add that” Monetary policy makers face a tougher challenge: controlling inflation while avoiding a hard landing in the economy “.
The Fed sets its rhythm
For those who still doubt it, the Federal Reserve is sending a message that could not be clearer. The Fed is willing to allow a recession as the price to pay for regaining control of inflation. ” The problem with this approach is that it has the unwanted effect of forcing other central banks to try to move forward to prevent the inflationary shock caused by the surge of the dollar against their own currencies.s,” warned Michael Hewson, chief market analyst at CMC Markets.
The Bank of England, the Bank of Norway and the Swiss National Bank therefore raised their interest rates yesterday, while the Bank of Japan (BoJ) passed its turn. On the other hand, it intervened in the foreign exchange market for the first time since 1998, to stop the fall of the yen. The latter recovered somewhat against the dollar. But this intervention does not address the cause of the weakness of the Japanese currency: the gap between the ultra-accommodative policy of the BoJ and other central banks.
Airbus confirmed, the M6 desired by MFE
Total Energy fell to 2.9%, the movement of monetary tightening around the world strengthened fears about demand.
Banks were dragged down by Credit Suisse, which hit record lows in Zurich after testing investors for a capital increase, sources cited by Reuters said. In Paris, Societe Generale drop 2% and BNP Paribas 1.6%
Biggest increase in Cac 40, Airbus increased by 2%. As part of its investment day, the aircraft manufacturer confirmed its intention to deliver around 700 aircraft this year despite difficulties encountered in its supply chain. He also said he is committed to strengthening shareholder returns.
M6 jumped 8.6% after an article by La Stampa according to which the media group MediaforEurope, of Silvio Berlusconi, will present a non-binding cash offer of 48.3% of the capital of the French chain put up for sale by Bertelsmann.
Nexity gives 4.6%. Oddo BHF downgraded the real estate developer from “neutral” to “underperformance”.
Neoen falling 7.9%, weighed down by a note from Citi, which went from “neutral” to “sell” on the title. The same mediator started monitoring Veolia environment (-2.3%) to “neutral” in the target 21 euros.