CAC 40: Big cold downpour in reaction to 'CPI', everything goes down

CAC40: US CPI washes over all markets, stocks and rates

The Palais Brongniart, former headquarters of the Paris Stock Exchange.  (Photo credit: / L. Grassin)

The Palais Brongniart, former headquarters of the Paris Stock Exchange. (Photo credit: / L. Grassin)

(CercleFinance.com) – Big shower on the markets at 2:30pm with the most anticipated data since early October, ie the US CPI: Inflation is stronger than expected and the CAC40 loses – 170Pts (-2.75%) in a straight line in 5 minutes, as part of a counterattack that will be one of the most violent this year.

Some buyers attempted a bluff before the release, causing the CAC to rise more than 1% between 12 p.m.

France is also immersed in a context of social tension and, above all, a possible paralysis of activity with dry service stations, strikes at nuclear power plants, dockworkers’ strike and rumors of a strike at the SNCF: without fuel and without public transport, is the scenario of 1995 that begins to emerge with the risk of sudden collapse in the resulting recession.

The call for a general strike by the CGT -if it were to be heeded, which would be unprecedented since May 1968- will probably worry France’s creditors and our OAT will see its performance increase by +7 points to 3.02%.

The Euro-Stoxx50 fell -2% and fell again to 3,260 after Amsterdam, which fell almost -3%.
The monthly report on inflation in the United States published by the Department of Labor is worse than the worst forecasts: the United States consumer price index rose 0.4% in September and +8.2% compared to the same month of 2021 (after 8.3% in August, but Jefferies, like many other brokers, anticipated a drop to 8.1%.

Excluding energy (+19.8%) and food products (+11.2%), two traditionally volatile categories, the “core” annual inflation rate increased by +0.4% to 6.6% compared to last month, the worst score since… 1982.

Claims for jobless benefits increased by +9,000 during the week of October 3 in the United States, amounting to 228,000, compared to 219,000 the previous week, according to the Department of Labor.

The four-week moving average, which can be seen as a better indicator of the underlying labor market trend, has also risen slightly to 211,500 versus 206,500 in the previous week.

The Fed’s ‘minutes’ released on Wednesday night did little to reassure: ‘Fed officials expect rates to remain high for some time. They will continue to increase them until they see clear signs of a slowdown in inflation”, summarizes the Californian bank Wells Fargo.

Yields on US T-Bonds shrink +17pts to 4.07%, the ’30-year bonds’ reach 4%, causing a drop of -2.2% in the S&P500 in pre-opening (below the 3,500Pts) and -2.5% on the Nasdaq.

The Euro fell -0.5% to $0.9655, only the British Pound recovered +0.8% while Liz Truss hinted that she would be about to reverse her tax reform, which makes many observers say that the Bank of England and the markets have ‘won’ (but at the cost of abysmal losses in value in UK ‘gilts’, which eased from -20Pts to -25Pts.

This does not prevent the London stock market from falling -1.5%.

In terms of securities, Eiffage announces the acquisition of 70% of the capital of SNEF Telecom, a subsidiary of the SNEF group and a key player in the French mobile telecommunications market with a turnover of close to 200 million euros in 2021.

The day after its meeting with the unions, TotalEnergies says it informed them it was ready to consider a budget for 2023 wage increases based on 2022 inflation.

In addition, the group announces the assignment to all its employees worldwide of an exceptional bonus corresponding to one month’s salary that will be paid in December, subject to salary agreements in the different countries and corresponding subsidiaries.

Oddo BHF reaffirms its ‘outperformance’ view of Sodexo with a high price target of €82-€92, while the catering and services group will host an Investor’s Day (CMD) on November 2 in Paris.

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