Bad session and bad week in equity markets. The Cac 40 fell 2.27% on Friday, falling below the threshold of 5,800 points (5,783.41 points), in a traded volume of 3,700 million euros. For the week, the flagship index fell 4.84%, its biggest weekly decline since June, and for the year it is down 19%.
Compared to its peak of 7,384.86 points on January 5, however, it lost 21.6%. Such a downward move of more than 20% from a past high is the definition of an entry into a “bear market” phase, a bear market, in which the bears, the sellers of the market, have taken the lead. lead. about the “bulls” or buyers.
The main investigation offices also seem to be resigned. ” Based on our discussions with our clients, most equity investors have now viewed a hard landing scenario for the economy as inevitable. says Goldman Sachs. They are trying to arbitrage their positions for strategies that take into account an imminent entry into recession, the scope and duration of which, however, have yet to be determined. The American expert lowers his year-end target for the S&P 500, also in the “bear market” and only points to 3,600 points, compared to the previous 4,300 and somewhat below 3,700 points this Friday (-1.86% ). The Dow Jones, with a fall of 1.67%, is below the symbolic threshold of 30,000 points, the lowest of the year.
contraction in the euro zone
On Wednesday night, at the last meeting of its FOMC, which ended with a third hike of 75 basis points in US interest rates, the Federal Reserve sent out a message that could not be clearer. It is willing to tolerate a recession as the price to pay to regain control of inflation. ” The problem with this approach is that it has the undesirable side effect of forcing other central banks to try to keep pace in order to contain the inflationary shock caused by the dollar’s rise against their own currencies. warns Michael Hewson, chief market analyst at CMC Markets.
The Bank of England, the Bank of Norway and the Swiss National Bank all raised interest rates yesterday, while the European Central Bank also raised rates on September 8 by 75 basis points. triggering an entry into recession, perhaps already in place.
This seems to be indicated by the preliminary PMI indices for September published this morning by S&P Global for the euro zone, which fell 1.6 points to 48.5 in industry and 0.9 points to 48.9 respectively in services, marking lows of 27 and 19 months respectively. The threshold of 50 points marks the limit between the growth and contraction of the activity. ” A recession is looming in the euro zone, as companies in the region have reported a deterioration in the economy, as well as rising inflationary pressures, linked to rising energy prices. writes Chris Williamson, chief economist at S&P Global. And to add that ” Monetary policymakers face an increasingly difficult challenge: controlling inflation and avoiding a hard landing for the economy. “.
Speculation on M6
In this context, practically all the components of the index finished in the red on Friday. Beginning with the large industrialists who are Renault, Stellantis, michelin Where ArcelorMittal. Same Suchboosted this week by the return to the stage of Vladimir Putin, fell more than 5%. Total Energies It fell 4.9%, as much as a barrel of Brent, to 86 dollars.
Banks, for their part, were weighed down by swiss credit, which hit a record low in Zurich, after testing investors for a capital increase, according to sources cited by Reuters. In Paris, General Partnership lost 3.9%, Agricultural Credit Y BNP Paribas More than 2%.
The rise of the day is outside the index. M6 jumped 8.1% after an article in the Italian newspaper the print according to which Silvio Berlusconi’s media group MediaforEurope will present a non-binding cash offer for 48.3% of the capital of the audiovisual group put up for sale by Bertelsmann.
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