The Paris Stock Exchange saves face thanks to Wall Street, Market news

Did you say “October”? At the mention of the name of the tenth month of the year, many investors tend to lower their heads, recalling the dark months of October that have marked stock market history, including the crashes of 1929 and 1987, even if, from a fundamental point of view, September is the worst month on the stock market for the S&P 500, and by extension for the CAC 40.

Friday’s improvement (+1.51% for the Parisian index) almost made a pschitt. Indeed, the session got off to a bad start, Cac 40 touching a low of 5,654.44 points (-1.88%) around 10 a.m., before starting a slow rise and then returning to positive territory thanks to the support of Wall Street, where the Dow Jones (+2.1%) and the Nasdaq Composite (+1.5%) are raising their heads after two sessions of sharp decline. At the close, the flagship index of the Paris Bourse gained half a point, to 5,794.15 points, in a transaction volume of 3 billion euros.

Credit Suisse risk

Nevertheless, investors remain on their guard against the accumulation of risks, which range from inflation to recession, via the rise in interest rates, the British crisis and the setbacks of Credit Suisse. ” We spent the weekend wondering if Credit Suisse would finally go bankrupt or not. And the bank’s executives spent their weekend trying to reassure investors that the bank has strong capital and liquidity to avoid a fall. sums up Ipek Ozkardeskaya, senior analyst at Swissquote Bank. Their efforts did not pay off: the title Swiss credit is trading at less than 4 Swiss francs, while CDS (credit default swaps) have exploded. These derivative products intended to protect against the risk of default by its issuer have gone from around 60 basis points at the start of the year to 250 basis points, which means that the market is very clearly anticipating a payment default by the one of the largest Swiss banks. It will present its restructuring plan on October 27. Can Credit Suisse go bankrupt? “ Yes, it is possible, but it is very unlikelyanswers Ipek Ozkardeskaya. Credit Suisse is certainly ”too big to fail” [trop gros pour faire faillite, ndrl]. What could happen is a Christmas miracle and the bank’s new CEO strengthens the bank’s backbone within 100 days, as he promised, and the establishment prospers until the next scandal. Or it becomes a nice takeover target and gets eaten up by another bank. Or that she be saved by the Swiss authorities. »

Further north in Europe, the United Kingdom is also sinking into crisis. The “honeymoon” between the population and the new Prime Minister Liz Truss been particularly short, if not non-existent… His “plan for growth”, drawn up with the Chancellor of the Exchequer Quasi Quartengproviding for massive tax cuts, set the pound on fire and sword, causing it to capsize close to parity with the dollar. Drawing lessons from this episode, the Chancellor of the Exchequer announced on Monday Twitter the withdrawal of its plan to abolish the top bracket of income tax.

We get it, and we have listened. https://t.co/lOfwHTUo76>pic.twitter.com/lOfwHTUo76

— Kwasi Kwarteng (@KwasiKwarteng)https://twitter.com/KwasiKwarteng/status/1576820620293468160?ref_src=twsrc%5Etfw>October 3, 2022

A little more under the threshold of 50

This allows the pound to regain ground, but only marginally appeases operators who have many other concerns, first and foremost inflation and recession. Published during the morning, the manufacturing PMI established by S&P Global for the euro zone stood at 48.4 points in September, a 27-month low, compared to 48.5 in the first estimate and 49.6 in August, sinking further below the critical threshold of 50 which separates growth and contraction in activity. ” The pernicious combination of a manufacturing sector in recession and an acceleration of inflation highlighted by the latest PMI data is further weakening the economy of the zone euro. Excluding the months of lockdowns imposed during the health crisis, eurozone manufacturing demand and production had not shown declines of such magnitude since the height of the global financial crisis in early 2009. commented Chris Williamson, Chief Economist at S&P Global.

Aggravating factor, the oil went up again – the barrel of Brent climbed 3.4% to $88.1 – , in reaction to press reports that OPEC + delegates are preparing to discuss a reduction of more than 1 million barrels per day of their production in order to support the prices of black gold, which have fallen by more than 30% since the peak of last March, after the invasion of Ukraine by the Russia. That would be the biggest drop since 2020.

Among the other values, the tech compartment ended in decline, Get hold of it, Dassault Systems et Worldline yielding between 0.4% and 0.54%. Finally, Air France-KLM dropped 4.5% after HSBC downgraded its rating from ‘buy’ to ‘hold’.