Cac 40: The threat of a recession plunges the Paris Stock Exchange below 5,900 points

(BFM Bourse) – The Paris Stock Exchange continues to sink new lows from the first exchanges. The CAC 40 dropped more than 2% below 5,900 points on Thursday morning. Investors see growth prospects rapidly deteriorating, at a time when the imperative to fight inflation will no longer allow central banks to generously support the economy.

For the last session of June and of the half-year, the Paris Stock Exchange remains on a downward trend, while the global economy is threatened with a sharp slowdown while central bankers are working on the Herculean project of reducing inflation at its highest level for decades.

The CAC 40 fell sharply in the first exchanges, by 2.16% to 5,905.68 points after having registered a low of 5,885.85 points a few tens of minutes after the opening. The awakening is therefore brutal for the three-color flagship index which is currently down 8% over one month and 15.7% since January 1.

If there’s one thing markets take away from Jerome Powell’s latest salvo, it’s that the president of the US central bank acknowledges that there is a risk of overdoing it when it comes to tightening. monetary policy, but that it prefers to run this risk rather than that of letting the surge in prices slip away any longer. No guarantee that the Fed will manage to avoid a recession in the battle… A perspective that is very far from the taste of the equity markets.

Inflation concentrates all the concerns of investors. In France, consumer prices accelerated again in June to 5.8% over one year, after 5.2% the previous month according to a provisional estimate from INSEE published on Thursday. On the other side of the Pyrenees, inflation reached 10.2% in June over one year, to peak at a high of 37 years, according to the first estimate of the National Institute of Statistics of the country.

Operators will be extremely attentive to consumer spending in the United States for the month of May as the latest statistics published in recent days on consumer sentiment have cast a chill over the markets. The content of the core PCE consumer price index will give indications to the US Federal Reserve to assess the trajectory of prices across the Atlantic.

On the black gold side, oil-exporting countries and their OPEC+ allies are meeting this Thursday a few weeks after giving the green light to produce more oil. Oil prices take a break as signs of a slowing economy mount. WTI fell 0.1% to $109.59 while Brent returned 0.4% to $115.33.

Without a marked sectoral trend, the Parisian coast comes alive here and there with a few company announcements. Vivendi grabs 0.3%. His Canal + channel has just won the broadcasting rights for the Champions League (C1), the Europa League (C3) and the Europa League Conference (C4) from 2024 until 2027.

TotalEnergies gives back 1.15%, the oil group will offer a rebate of 10 to 12 euro cents on a liter of fuel for motorists filling up at its service stations on the motorway this summer.

Orpea sells 3.6% while the group of retirement homes, in turmoil since the release of a book-investigation at the beginning of the year, published the final conclusions of an audit confirming, among other things, malfunctions in practices managerial.

Compagnie des Alpes lost 0.3%. The leisure group has submitted a firm offer to the shareholders of the MMV group with a view to acquiring 85% of the capital of the second hotel operator in the French Alps, which notably operates 10 club hotels and 10 club residences.

Sabrina Sadgui – ©2022 BFM Bourse

Leave a Comment