2023-06-19 15:54:27
Like the European and Asian financial markets, the Paris Stock Exchange backtracked on Monday after posting its best weekly performance since mid-April. Some observers wonder whether the recent rebound is excessive given the uncertainties surrounding the Fed’s monetary policy and the strength of the Chinese recovery. At the close, the Cac 40 dropped 1.11%, to 7,311.21 points, but in a low trading volume of 2.6 billion euros due to the absence of American investors on this closing day. Wall Street for “Juneteenth”, which commemorates the abolition of slavery. The Dax 40 lost 0.95% in Germany, Tokyo ended down 1%.
On Friday, the S&P 500 closed lower while posting its fifth consecutive weekly advance. The Nasdaq Composite rose 3.3% over the week. ” Both indices are now at their highest since last spring, and both are in the overbought zone. Volatility continues to decline as investors wonder if this is the calm before the storm warns Ipek Ozkardeskaya of Swissquote.
Fed officials break silence
The Federal Reserve paused in its monetary tightening cycle last Wednesday, but its dot chart symbolizing its members’ expectations suggests two more rate hikes this year. On Friday, Governor Christopher Waller said core inflation ” does not decrease as I thought “. Thomas Barkin, the president of the Richmond Fed, considered that the scenario of a slowdown in inflation is plausible while saying to himself ” comfortable with the idea of further rate hikes by the end of the year. Eleven Fed officials are scheduled to speak this week, including its chairman.
Jerome Powell will deliver his semi-annual monetary policy address to the House of Representatives and the Senate on Wednesday and Thursday, respectively. This meeting ” should be the key event of the week, but as it comes just after the monetary policy committee meeting, it is difficult to know what he could say that is particularly new », s’interroge Jim Reid de Deutsche Bank.
The Chinese central bank should reduce the rate of its medium-term preferential loans in order to revitalize certain sectors. But, for the time being, the authorities have not yet unveiled other specific measures to support the economy, contenting themselves with indicating after a meeting on Friday that they will be presented “when the time comes “. Goldman Sachs, which expects smaller measures than expected, has revised down its forecast for the growth of the Chinese economy to 5.4% this year, against 6% previously and 4.6% at 4.5% for 2024. Sensitive to the Chinese economy, luxury stocks and major cyclicals are falling. LVMH, Kering and Air Liquide lost 1.6% to 3.8%.
Dissension within the ECB
Closer to home, some members of the ECB council believe that future rate hikes could be necessary after the July one suggested by Christine Lagarde. ” We still have a long way to go said Joachim Nagel, President of the Bundesbank, and added that ” we may continue with rate hikes after the summer holidays “. Isabel Schnabel believes that now is not the time for complacency and that we will have to continue to raise rates “ even if it means sinning by excess ».
The Belgian Pierre Wunsch believes for his part that we need a ” substantial drop » in underlying inflation so that the ECB does not raise its rates in September. ” If core inflation remains around 5% on an annualized basis over the next few months, we will have to tighten beyond September “, did he declare. Philip Lane, chief economist of the ECB, was more nuanced by recalling that “ September will be decided in September, July will be decided in July ».
Sartorius Stedim falls on the stock market
Sartorius Stedim Biotech fell 12.8%. The group specializing in the production of pharmaceutical equipment and laboratory equipment lowered its financial forecast for 2023, anticipating weaker than expected demand in the second half. The group notably indicated that it now expects for the 2023 financial year that “ revenue decreases by a percentage between the low and middle of the tens range “. The margin target has also been lowered.
Vinci lost 4% and Eiffage 5.4%. The government has obtained the approval of the Council of State to tax motorway companies more, relate The echoes.
Conversely, Airbus has nibbled 0.3%. The aircraft manufacturer is on the right track to achieve its target of 720 deliveries this year, said the group’s executive chairman, Guillaume Faury, in an interview with the Tribune, as the air show at Le Bourget opens. The aircraft manufacturer has also signed a large order with IndiGo.
Getlink rose 2.2%. Morgan Stanley raised its recommendation on the Channel Tunnel operator from “line weight” to “overweight”.
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