The Paris Bourse rebounded by 1.28% on Friday, despite a gloomy economic context and an American central bank (Federal Reserve, Fed) still determined to raise its rates.
The CAC 40 index gained 79.62 points to 6,285.88 points around 10:15 a.m. and was heading for a very slight weekly increase. Thursday, he had finished down 1.01%, following a volatile session.
The markets are obsessed with the Fed and the pace of its rate hikes to fight runaway inflation.
“Over the last week, the market seems to have opted for a significant probability of recession, partly induced by high inflation and above all by a sharp rise in key central bank interest rates”, summarizes Sebastian Parix-Horvitz, Director of economic research at La Banque Postale AM.
On Friday, nothing really explained the rebound in stock market indices, except statements by the President of the Fed, in line with his previous speeches.
On Thursday, Jerome Powell said he favored two 0.5 percentage point hikes at the next two meetings of the monetary institution “if the economy develops as expected” and, according to Bloomberg, he reaffirmed that the Fed did not envisage a rate hike of 0.75 points.
The US central bank raised rates by half a percentage point on May 4 – the biggest hike in more than 20 years – following an initial hike of a quarter point in March.
But the Fed boss warned that controlling inflation “won’t come without pain”.
The continuation of its monetary tightening might prove more complicated than initially anticipated: “the question of whether we can execute a soft landing or not, it may actually depend on factors that we do not control, “said M Powell.
In France, inflation reached 4.8% over one year in April, following 4.5% in March, indicated INSEE, confirming its first estimate.
On the geopolitical level, tensions over Russian gas supplies in Europe are worrying investors following drops in deliveries received in Germany and the cessation of the use of a gas pipeline by Gazprom.
Fall in Orpea’s profit
The group of private nursing homes Orpea, in turmoil since the release in January of a book-investigation, announced that it had signed an agreement with its banks to ensure its financing in the face of the uncertainties weighing on the company, following a plunge of nearly 60% of its annual net profit. The title of the group fell by 5.23% to 32.08 euros. Since the beginning of the year it has lost more than 60%.
