2023-11-10 11:47:00
(BFM Bourse) – The Paris Stock Exchange is losing ground, undermined by the restrictive remarks of Jerome Powell, dampening the hopes of the markets which were projecting rate cuts next year. The CAC 40 lost more than 1% on Friday at mid-session.
Hopes dashed. The markets, which had been buoyed by the hope that the rate increases were coming to an end, have just suffered a severe backlash following the speech of the president of the American Federal Reserve.
Jerome Powell put an end to the procrastination on so-called “terminal” rates, namely whether or not a peak on Fed Funds has already been reached. The Fed president clarified that his members were not convinced that key rates were high enough to fight inflation.
“The Fed is committed to implementing a sufficiently restrictive monetary policy to bring inflation down to 2% over time,” said Jerome Powell, who said he was not convinced “of having reached such a position.”
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Words that add to the Parisian trend this weekend. The CAC 40 is currently losing 1.13% to 7,031.10 points and erases its advance acquired on Thursday (+1.1%) The results are now slightly negative for the flagship Parisian index (-0.13%) over the week. ..
Bond rates on the rise
Investors are awaiting, not without great excitement, the intervention of the President of the European Central Bank, Christine Lagarde, this Friday during a conference in London.
On the bond market, Jerome Powell’s speech also caused a reaction. American yields have recovered since the interest rate on the 10-year American debt is reaching 4.64% whereas it was below 4.50% two days ago. Just like the interest rate on the 10-year French government bond is up to 3.326%, compared to 3.23% on Thursday.
Note that the bond market is also reacting to weak market demand for an issue of 30-year bonds by the US Treasury.
Valneva sought, spirits toast
On the value side, Totalenergies rose by 1.7% supported by the rebound in oil prices, following their sharp decline of 5% over the week amid concerns regarding global demand.
On the other hand, spirits groups are toasting on the Paris Stock Exchange in the wake of Diageo, which plunged 10% in London following warning regarding future demand for alcohol. Pernod Ricard and Remy Cointreau lost more than 5.8%.
Luxury isn’t in great shape either. Kering (-4.7%), LVMH (-3.9%) and Hermès (-2.7%) are suffering from the results of the Swiss Richemont, which announced a half-year result lower than expectations.
Excluding the flagship index, Valneva rose 7.2% following obtaining the green light from the United States for its anti-chikungunya vaccine.
On the foreign exchange market, theeuro is almost stable at 1.0680 dollars. As for oil, it continues its rebound that began the day before. A barrel of Brent from the North Sea, for delivery in January, appreciated by 1% to 80.85 dollars. Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in December also gained more than 1% to $76.53.
Sabrina Sadgui – ©2023 BFM Bourse
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