The Paris Stock Exchange remained anchored in the red throughout this session this Friday, without managing, at the same time, to align a seventh consecutive week of progression. It absolutely had to end, even stable. The Cac 40 lost 0.94%, to 6,495.83 points, in a traded volume of 2,800 million euros. For the week, the index lost 0.89%, but has still gained almost 10% since the end of June. In New York, too, the time has come to retire. the dow jones yields 0.88%, the S&P500 loses 1.34% and the Nasdaq Composite 2.09%.
Traders are plagued by inflation that does not want to dry up in Europe, where producer price rises, for example, far exceeded expectations in July in Germany. They shot up 37.2% in one year, well above the 32% expected by consensus, and 5.3% in one month. This is the largest increase observed by the Federal Statistical Office since studies began in 1949. In the country’s wholesale market, the price of electricity is at a new peak of more than 550 euros per megawatt hour due in 1 year .
Is there no inflation peak before 2023?
The outlook for inflation in the euro zone has not improved since July’s rate hike, Isabel Schnabel, a member of the European Central Bank’s board of directors, said yesterday morning. Enough to fuel the suspense about a rise of 25 or 50 basis points in the refi at the next meeting in September, a new twist, after the 0.5 point rise in July, which seems to have been acquired. ” I would not rule out that in the short term inflation will continue to rise. These inflationary pressures are likely to be around for some time, they won’t go away quickly. Elizabeth Schnabel admitted. BlueBay Asset Management expects inflation to rise to 15% in the UK, with a peak that, generally in Europe, will not be reached before the start of next year.
A more aggressive attitude on the part of the ECB, which would be bad news, since the growing risks of the euro zone entering a recession loom. ” Material and labor shortages are affecting the construction sector and, while these headwinds may ease for the rest of the year, tighter monetary policy is expected to accentuate the decline in activity. estimates the firm Capital Economics. The latest surveys confirm that the sector is expected to reduce Eurozone GDP by around 0.25% in the third quarter, and the worst could be yet to come. »
US real estate on the verge of recession
” German economic activity was flat in the second quarter, as most eurozone countries grew fairly quickly on the back of the post-pandemic reopening. We believe that German GDP will inevitably contract in the next three quarters as headwinds from rising energy prices and interest rates intensify. “, the same investigative office wrote a little earlier in the week. Germany accounts for more than 30% of the eurozone’s GDP.
The same observation is made in the United States, moreover, where the real estate sector is already in a situation close to recession. Existing home sales, released yesterday afternoon, fell another 6% from June to July, a drop of 20% in a year. Real estate resales are at their lowest level since May 2020.
Inflation prospects that have particularly weighed on real estate companies in Paris. covivio, Icade, Klepierre, Unibail-Rodamco-Westfield Y Gecina They all fell on Friday.
Banks and large industrials were also among the biggest losers in the session. ArcelorMittal lost 4.9%, Renault Y Stellantis about 3%, Airbus 2.2%, BNP Paribas Y General Partnership almost 3%, given the growing difficulties in granting loans and the risk of business bankruptcy in a recession period. Instead, Total Energies it exceeded the trend again (-0.2%), driven by the issue of energy prices.
Jerome Powell more incisive in Jackson Hole?
The next big event is undoubtedly the Jackson Hole Symposium, the annual US gathering of the most influential fundraisers on the planet. It will be August 26, the date has been confirmed by the US Federal Reserve.
There too, suspense, some believing that this could be the occasion for the central bank president, Jerome Powell, to raise his voice, although the publication of the inflation and employment figures for the month of August will undoubtedly be the most decisive. elements of the decision of the institution’s monetary policy committee during its September session.
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