2023-09-19 10:34:19
Published on September 19, 2023 at 12:34 p.m.
The Paris Stock Exchange is gaining a few points in a nervous market. The surge in oil prices above $95 per barrel supports large caps in the sector in Europe while fueling fears regarding inflation and the response of central banks. On the macroeconomic front, Eurostat revised its inflation estimate downward from 5.3% to 5.2% year-on-year in August in the euro zone, following 5.3% in July. Excluding food and energy, the price increase was confirmed at 5.3% year-on-year following 5.5% the previous month. The OECD, for its part, raised its global growth forecast for 2023, while lowering that for 2024 to 2.7%, compared to 3% previously. With the exception of 2020, marked by the Covid 19 epidemic, this growth rate would be the lowest since the financial crisis.
At mid-session, the Cac 40 rose 0.37% to 7,303.38 points in a symbolic business volume of less than 600 million euros. Futures contracts on American indices gained around 0.1%.
Towards a “hawkish pause” from the Fed?
The US Federal Reserve’s interest rate decision is on everyone’s minds as the central bank begins a two-day meeting of its Monetary Policy Committee (FOMC) on Tuesday. While the prospect of maintaining the federal funds rate in a range of 5.25% to 5.5% is not debated among economists, the expression “hawkish pause” often comes up.
Observers will monitor the Fed’s new economic forecasts, but especially the “dot plot”, a dot graph illustrating the FOMC members’ interest rate expectations. The main question is whether the FOMC will maintain its forecast of another 25 basis points hike by the end of the year, once morest the backdrop of the number of rate cuts anticipated for 2024. In its estimate In June, the Fed expected an easing of one percentage point next year.
SMCP plunges following lowering its forecasts
Societe Generale lost another 0.6% while Exane BNP Paribas downgraded the bank from “outperform” to “neutral” to now target 28 euros, compared to 40 previously.
TotalEnergies gained 1.5% following a peak at 63.01 euros, in view of its historic record of 63.40 recorded in 2007. The barrel of Brent touched a new 10-month high at 95.33 dollars this morning, before returning to 94.95. Some traders are betting on a barrel jump to more than $100 next week.
Renault and Stellantis gained 2.7% and 1.7% respectively in the wake of the 1% increase in the automobile Stoxx 600, which marks the best sectoral performance in Europe.
SMCP falls more than 27%. The ready-to-wear group has revised its forecasts downward for this year and is counting on mid-single-digit growth in sales at constant exchange rates.
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