When we talk a little less about the war in Ukraine, or even the presidential election in France, it is the turn of American rates to worry the stock market. And not just a little… The Cac 40 fell by more than 3% before raising the bar a little but still ending down sharply by 2.21%, at 6,498.83 points, in a trading volume quite provided with 4.5 billion euros. Since the start of the year, the index has once again lost more than 9%.
The market is dragged down by fears of a continuation of the surge in inflation, which would force the US Federal Reserve to accelerate the recovery of its monetary policy. A few hours before the publication of the minutes of the last FOMC meeting, the declarations of certain senior members of the institution alerted the operators.
After Brainard, Harker
This Wednesday, Patrick Harker estimated that inflation is far too high. Philadelphia Fed chairman fears inflation expectations are getting out of control anchoring “, reports the wall street journal, in other words that the rise in prices does not get out of control. He joins Governor Lael Brainard, who said Tuesday that the ” most important task is the fight against inflation, adding that the central bank will also have to tackle the rapid reduction of its balance sheet by nearly 9,000 billion dollars as of May in order to bring its policy towards “ a more neutral stance ” at the end of the year.
She also came out in favor of a half-point hike in the fed funds rate next month, which in itself is no big surprise, even though “ Ms. Brainard is typically one of the most ‘dovish’ members of the FOMC, notes Jeffrey Halley, market analyst at Oanda. If it went over to the super-hawks, the market would have to take that into account, and it did. QE’s honeypot [assouplissement quantitatif] is about to be closed “, he adds. In the United States, the yield on the 10-year bond is now moving to nearly 2.63%, against 2.4% on Monday evening. On the index side, the Dow Jones yields 0.8%. the Nasdaq Composite fall, him, of more than 2.5%.
Many losers in the stock market
In France, the yield of the 10-year OAT crossed the 1.2% threshold on Wednesday for the first time since 2015, with a peak at 1.2244%. The pay gap with the German Bund of the same maturity is at its highest level since the start of the health crisis in March 2020. The movement is fueled by the latest polls, reflecting a smaller gap in voting intentions between the President outgoing, Emmanuel Macron, and the candidate of the National Rally, Marine Le Pen. BNP Paribas, Societe Generale and Agricultural credit still lost between 2.4% and 3.4%.
Industrialists are also among the victims of the day. Saint Gobain lost 4.4%, Schneider-Electric 5.1%, Stellantis 4.4% and Renault 3.8%. Just like the few big techs and growth stocks on the rating, weighed down by the prospect of a rapid rise in interest rates. Teleperformance dropped 4.5%, Capgemini 3.9% and Dassault Systems 4.1%.
New sanctions against Moscow
On the Ukraine front, new sanctions were expected from the West against Russia. The United States thus announced at the end of the afternoon that the new list will include, for the first time, individual sanctions against the two daughters of the Russian president, Katerina Tikhonovna and Maria Poutina. ” We believe many of Putin’s assets are hidden behind his family members, and that’s why we’re targeting them said a senior US administration official. Foreign Minister Sergei Lavrov’s wife and daughter are also targeted, as are former Russian President and Prime Minister Dmitry Medvedev and Prime Minister Mikhail Mishustin. Two of the country’s largest banks, Sberbank and Alfa Bank, will also be subject to isolation for the first time, except for energy purchases. Finally, it is now totally forbidden for an American to invest in Russia, whether resident or living abroad.
Among the rare rises of the day, Thalesin defense, gained 0.7%. crossroads rose 2.2%. Kepler Cheuvreux raised its price target from 21.21 to 23 euros ahead of its quarterly results, citing performance “ solid in Brazil and France. Barclays is aiming for 22 euros, against 20.50 previously. The pharmaceutical laboratory Sanofi took 1.4%.