Another 1% drop on the Paris Stock Exchange, it is now a question of “pricing” the regression
Posted Dec 16 2022 at 10:36
The Paris Stock Exchange takes the path of decline in the middle of the morning, reading the first of the activity but improving in the euro zone for the month of December. All components mark them, indeed, a rebound. The composite PMI flash index thus recovered to 48.8 points, a four-month high, against 47.8 in November. Its industrial component rose from 46 to 47.9 points and that of services from 48.5 to 49.1 points.
” While December’s renewed activity response in the eurozone underscores the very high likelihood of a regression in the region, the latest data from the PMI survey will also imply that the economic slowdown will be less severe than anticipated a while ago. some months, says Chris Williamson, chief economist at S&P global. The data collected over the whole of the fourth quarter of 2022 is indeed suitable for a quarterly decline in GDP of only 0.2%, while the current orientation of the survey’s forward-looking indicators points to a further slowing of the contraction in the first quarter of 2023. »
“Christine Lagarde has killed all hope”
But nothing helps. After the latest statements from central bank bosses, investors are now convinced that we are still very far from the end of rate hikes and that it is now a question of pricing the scenario of the entry into decline.
Mid-morning, the About 40 lost nearly 1%, to 6,460.14 points. Risk-taking is all the more limited as Russia seems to have resumed its offensive in Ukraine, with new bombardments reported in kyiv and Kherson. In New York, the major indices are expected to fall by more than 1%.
For Ipek Ozkardeskaya, of Swissquote, it is the speech of the President of the European Central Bank which must be retained in priority of these last two days marked by the decisions of monetary policy: “ Christine Lagarde has killed all hope that the ECB is counting the slowing economy and recession as part of its monetary reduction cycle. She said the central bank will raise the rate another 50 basis points at its next meeting. Then by another 50 basis points at the next meeting. And another 50 basis points at the next meeting if necessary. Then another! In short, we are very far from the final level on the Old Continent, while in the United States, it was raised from 4.6% to 5.1%, without being certain that it will remain as it is.
Waiting for the Fed’s “mission accomplished”
For the analyst, Christine Lagarde gave the most offensive speech since her appointment. And yesterday’s meeting was certainly one of the most important for the eurozone since Mario Draghi’s ‘whatever it takes’ in July 2012 “. Another cause for concern, the ECB will begin to reduce its balance sheet from March (at the rate of 15 billion euros per month), ” but officials seem to have no idea how this will play out, as they have never done this before. That’s what they said “.
” The message is clearanalysis for his part George Saravelos, at Deutsche Bank, financial conditions must remain tight (…) Central banks will reject the riskiest assets until the labor market begins to recover. “The start of the year will remain very turbulent, the analyst further recommends, ” it’s a ‘mission accomplished’ statement from the Fed that will enable a more definitive turn in the markets “.
TotalEnergies at the top of the list
Few significant variations within the flagship index. At the bottom of the table, Kering loses another 1.8%. In contrast, TotalEnergies takes 0.7%. At the SRD, Elior Group progressed by 3.6%, best performance of the day.
Among the few announcements of the day, CGG sold its US land seismic data library for 59 million euros.
ADP announced that its traffic increased by 5.5 million passengers year-on-year in November with a total of 22.9 million passengers welcomed.