The Paris Stock Exchange faltered, it had to face a new fall in the Nasdaq Composite at the first exchanges, but it held out! After three consecutive declines, most notably a 2.21% drop on Wednesday, the Cac 40 recovered 1.34% in this last session of the week, not without more than 1 early morning. 8% to have won . Still, it recorded a weekly decline of 2.04% at 6,548.22 points.
In New York, operators remain concerned about the sharp rise in bond yields, which point to 2.7% on Friday for 10-year paper (2.38% at the end of last week and 1.63% at the end of 2021). technology and growth stocks, as well as, indirectly in Paris, on Dassault Systems (-3.6%), Worldline (-2.8%) or even STMicroelectronics (-0.6%).
The fed was too optimistic
† The expected rapid rate hike cycle indicates that, in hindsight, the Fed’s (and most economists’) ‘transition inflation’ scenario was overly optimistic, the central bank must now aggressively catch up after slacking on the curve Maneesh Deshpande, director of equity strategy wrote in a note UNITED STATES at Barclays. As part of its minutes released Wednesday evening, the Federal Reserve said it would reduce its balance sheet by $95 billion a month and that increases of more than 25 basis points are being considered to curb inflation.
Traders also await the start of the quarterly earnings season, which kicks off next week with releases from five major banks: JPMorgan on Wednesday, Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo on Thursday.
First round on Sunday in France
In France, attention is also focused on the first round of the presidential elections that will take place this Sunday. Emmanuel Macron and Marine Le Pen would come at the top of this vote for which they receive 26% and 22% of the voting intentions respectively, according to the Opinon Way – Kéa Partners barometer for the echoes and classic radio† The narrowing of the gap between the two candidates has weighed on Marine Le Pen’s pro-Putin and anti-European stances in recent days. † We expect Macron to be re-elected with a narrow lead over Le Pensaid Lale Akoner, market strategist at BNY Mellon Investment Management. A victory for Macron would be welcomed by the markets, marking the easing of political uncertainty and the renewal of a pro-corporate government. she adds.
However, ” if the prospect of an exit from the euro zone seems further away than during the 2017 campaign, the possibility of seeing Marine Le Pen come to power is still a major risk for financial markets For his part, Jonas Goltermann notes from Capital Economics. He further points out that “ the recent election crisis in favor of far-right candidate Marine Le Pen ahead of French presidential elections is beginning to affect financial markets †
Alstom and Sodexo at the top
Biggest increase in the Cac 40, Alstom rose 5.4%. The title of railway equipment supplier is one of Citi’s “top picks”. Although the broker is cautious about the prospects for the European electrical equipment sector, he is in favor of energy transition and automation. Citi also buys Rexel (+3.6%).
Sodexo also rose 5.4%, supported by a note from RBC, which went from “online performance” to “outperformance” on the collective catering group’s title. The analyst-author of the note believes that the discount of the promotion compared to its competitors is exaggerated in that its business model should enable it to withstand a more precarious environment and possibly in the throes of stagflation better than average.
