CAC 40: the recession continues

CAC 40: the recession continues

#CAC #recession #continue

The Palais Brongniart, former headquarters of the Paris Stock Exchange. (Photo credit: / L. Grassin)

(CercleFinance.com) – The Paris Stock Exchange is expected to continue its slide on Monday morning, against a backdrop of rising bond yields driven by monetary policy tightening by major central banks.

At around 8:15 am, the ‘future’ contract – May delivery – in the CAC 40 index fell 58.5 points to 6175 points, heralding the start of the day in negative territory.

The Parisian market had closed the session on Friday with a loss of 1.7% to 6,258 points, signing a fourth session of decline in the week, which translated into a weekly fall of close to 4.5%.

Equities continue to lose ground in a context of accelerating rises in real interest rates.

The 10-year US Treasury bond yield, the rise of which has helped the stock market correct since the beginning of the year, rose as much as 3.12% on Friday, bringing it closer to more than 10-year highs. .

Fears of an acceleration in monetary tightening were fueled last week by the Fed’s announcement of a 50 basis point hike in key rates, the first since 2000.

The rise in long-term interest rates is reviving fears of an increase in the cost of corporate financing and, therefore, of a slowdown in economic growth.

‘These growth fears have weakened an already feverish market sentiment, especially after Xi Jinping reaffirmed his commitment to his ‘zero Covid in China’ policy, explains one in Liberum.

Despite better-than-expected US employment statistics, Wall Street ended Friday’s session in the red, with the S&P 500 posting a fifth straight week of declines.

On the corporate side, earnings season is drawing to a close as 90% of publicly traded US companies and 75% of their European counterparts have already released their quarterly figures.

Groups such as Bayer, Disney, Siemens, Allianz, Telefónica or Deutsche Telekom have not yet presented their accounts this week.

Looking at the statistics, investors will be watching tomorrow for the release of the ZEW Economic Sentiment Index in Germany, then the Consumer Price Index (CPI) in Germany due on Wednesday.

The weekend, meanwhile, should offer some valuable insights into inflation developments on both sides of the Atlantic.

Wednesday’s speech by ECB President Christine Lagarde at a conference in Ljubljana could give more insight into the possibility of a first rate hike in July by the European Central Bank.

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