Bad session, and bad week on the equity markets. The Cac 40 fell by 2.27% on Friday, falling below the threshold of 5,800 points (5,783.41 points), in a trading volume of 3.7 billion euros. Over the week, the flagship index fell 4.84%, its biggest weekly decline since June, and over the year, it is now down 19%.
Compared to its peak of 7,384.86 points on January 5, it nevertheless lost 21.6%. Such a downward movement of more than 20% compared to a last high corresponds to the definition of an entry into a “bear market” phase, a bear market, in which the bears, the sellers on the market, have taken the lead. ascendancy over the “bulls” or buyers.
The major research offices also seem to be resigned. ” Based on our discussions with our clients, a majority of equity investors have now taken the view that a hard landing scenario for the economy is inevitable, says Goldman Sachs. They are trying to arbitrate their positions for strategies that take into account an imminent entry into recession, the extent and duration of which, however, remain to be determined. The American expert reduces his end-of-year target for the S&P 500, also in the “bear market” and is only targeting 3,600 points, against 4,300 previously and just under 3,700 points this Friday (-1.86 %). The Dow Jones, down 1.67%, fell below the symbolic threshold of 30,000 points, the lowest of the year.
Contraction in the euro zone
On Wednesday evening, at the last meeting of its FOMC, which resulted in a third increase of 75 basis points in interest rates in the United States, the Federal Reserve sent a message that could not be clearer. It is ready to tolerate a recession as the price to pay to regain control of inflation. ” The problem with this approach is that it has the undesirable side effect of forcing other central banks to attempt to keep pace in order to contain the inflationary shock caused by the surge in the dollar against their own currencies. warns Michael Hewson, chief market analyst at CMC Markets.
The Bank of England, the Bank of Norway and the Swiss National Bank raised interest rates yesterday, while the European Central Bank also hiked rates by 75 basis points on September 8. and that the tightening of the screws will undoubtedly continue, at the risk of triggering an entry into recession, perhaps already in place.
This seems to be indicated by the preliminary PMI indices for September published this morning by S&P Global for the euro zone, which fell by 1.6 points to 48.5 in industry and by 0.9 points to 48 respectively. 9 in services, marking lows of 27 and 19 months respectively. The 50-point threshold marks the boundary between growth and contraction in activity. ” A recession in the euro zone is looming, as companies in the region have reported a deterioration in the economy as well as rising inflationary pressures, linked to soaring energy prices. writes Chris Williamson, chief economist at S&P Global. And to add that ” monetary policy makers face an increasingly difficult challenge: controlling inflation while avoiding a hard landing in the economy “.
Speculation on M6
In this context, almost all of the components of the index ended in the red on Friday. Starting with the large industrialists that are Renault, Stellantis, Michelin Where ArcelorMittal. Same Thalesdriven this week by the return to the stage of Vladimir Putin, dropped more than 5%. TotalEnergies dropped 4.9%, as much as a barrel of Brent, back to 86 dollars.
The banks, for their part, were weighed down by Swiss credit, which hit an all-time low in Zurich, after testing investors for a capital raise, according to sources quoted by Reuters. In Paris, Societe Generale lost 3.9%, Agricultural credit and BNP Paribas more than 2%.
The rise of the day is to be found outside the index. M6 jumped 8.1% following an article in the Italian daily La Stampa according to which the media group MediaforEurope, of Silvio Berlusconi, will present a non-binding offer in cash for the 48.3% of the capital of the audiovisual group put up for sale by Bertelsmann.