2023-06-23 15:22:00
The stock markets had a week to quickly forget, which would be according to Bloomberg, the worst since March. In question, again and again, the signals emanating from central banks on the theme of inflation and the rise in short rates intended to contain it. Apparently central bankers are still unconvinced by the early signs of easing inflation. And as if to keep the pressure on, as the Bank of England added some pressure on the cost of money (from 4.50% to 5%), followed by the Bank of Norway (from 3.25% to 3.75%) and the Bank of Switzerland (from 1.50% to 1.75% while inflation is 2.2% in Switzerland), the officials of the American Federal Reserve (Fed) mentioned the possibility of two further rate hikes during the year. Increases that would bring the reference rates between 5 and 6%. For its part, the European Central Bank confirmed last week its intention to do the same, starting next month. Only China very slightly lowered the pressure on its key rates (-0.10%) due to too weak a recovery.
Real estate under pressure
Higher rates do not make the real estate sector happy. And, while none of the sectors included in the European Stoxx 600 index posted any progress over the past week, real estate posted practically the worst performance of the week after the energy sector, with a decline of almost 6%.
On the Brussels Stock Exchange, the Bel 20 index fell close to 4% over the week. And the RRECs (regulated real estate companies) therefore experienced painful sessions, WDP and Cofinimmo falling behind the European market average for their sector. But it was Aedifica that dragged our real estate stars down, with a weekly loss of nearly 15%. The company took shareholders by surprise by announcing a capital increase aimed at raising 380 million euros, but at a price well below the stock market price. From 64 euros before the announcement, the action fell to 56 euros. The proposal to subscribe for 2 new shares for 11 old ones at 52 euros should not delight the shareholders (21% of them) who had chosen the optional dividend reinvested in shares at a unit price of 67.31 euros.
The index of fear, on the floor
In the United States, while thousands of households see their real estate dreams vanish due to the rising cost of monthly payments on their variable-rate mortgages, the housing market seems to be recovering after an initial drop in prices. Moreover, has the context of rising interest rates increased volatility on the stock market? Judging by the behavior of the fear barometer, the ViX index of volatility, it would be quite the opposite. Curiously, this indicator is at its lowest for the year. But it is true that it is calculated on the basis of American markets. And that these remain fairly stable in the vast majority of their components, while the equity valuation indices are driven up by the 7 largest US capitalizations, currently driven by the fever around artificial intelligence. This week, moreover, Amazon jumped on the Nasdaq on the announcement of a large investment in this area. This dominance of heavyweights masks other variations, such as profit taking hovering around 10% on renewable energy stocks Enphase and Solaredge, or chip producers Intel and AMD.
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