CAC40: skyrocketing intraday volatility, unique rise

The CAC40 is back in the green (+0.4% to 5,845): Have the ‘firefighters’ been pushed to Europe and Wall Street this afternoon as the 3 major US indices tumbled to yearly lows with joy?

The combined and undifferentiated rise of +1.5% in the US indices (Dow Jones -0.2%, S&P500 -0.8%, Nasdaq -1.3%) appears to be part of the “muscle intervention” after the big cold spell , which the markets suffered at 2:30 p.m. with the most anticipated figure since the beginning of October, namely the US CPI.

Inflation is stronger than expected and the CAC40 is down as much as -2% to 5.701 (around 4pm), having peaked at 5.880 just two hours earlier (down -3% in a straight line, as part of a opposite that will be). among the most violent of the current year).

Some buyers had attempted a bluff ahead of the release, causing the CAC to rise more than 1% between 12:00 and 22:00.
They manage to limit the damage with this +130 point rebound from the CAC in 1 hour.

But inflation and the central banks’ response to it are not the only concerns: France is in a context of social tensions and above all a possible paralysis of activity with dry fuel stations, strikes at nuclear power plants, a dockers’ strike and rumors of a standstill at the SNCF and the RATP from early next week: With no fuel and no public transport, the scenario of 1995 looms, with the risk of a sudden plunge of the resulting country into recession.

The CGT’s call for a general strike – if followed, which would be unprecedented since May 68 – is likely to worry French creditors and our OATs will push their yield up +7 points towards 3.02% before settling at rebalancing about 2.94%, the bund even slipped -2 ​​points to 2.32% from 2.42 around 3pm.

The monthly US inflation report released by the Department of Labor comes in worse than the worst forecasts: the US CPI rose by 0.4% in September and by +8.2% compared to the same month of 2021 (after 3/8/2021) . % in August, but Jefferies, like many other brokers, was expecting an 8.1% decline).

Excluding energy (+19.8%) and food (+11.2%), two traditionally volatile categories, annual “core” inflation rose to 6.6% last month, its worst reading, from +0.4% since … 1982 .

Jobless claims in the United States rose +9,000 to 228,000 in the week of October 3, up from 219,000 in the previous week, according to the Labor Department.

The four-week moving average – which can be seen as a better indicator of underlying labor market developments – is also up slightly, coming in at 211,500 versus 206,500 a week earlier.

The Fed’s “protocol” published on Wednesday evening did little to calm things down: “Fed officials expect that interest rates will remain elevated for some time. They will keep increasing them until they see clear signs that inflation is slowing down,” summarizes Wells Fargo, a bank in California.
US T-Bond yields tightened +17 points to 4.08% before retreating to 4.000%, the ’30 year’ also hit 4%.

The euro fell -0.5% to $0.9655, only the sterling rallied +0.8%, while Liz Truss indicated that she would back down on her tax reform, many observers say admits that the Bank of England and the markets have “won” (but at the cost of horrendous falls in UK Gilts: they loosen -15 pts on the “10 year” 4.28%, from -20 pts on average the ’20 years’ and the ’25 years’ to 4.7500%.

In terms of values, luxury suffers: Herms falls -4%, Pernod Ricard -3% and LMVH -2%.
Eiffage announces the acquisition of 70% of the capital of SNEF Telecom, a subsidiary of the SNEF Group and a major player in the French mobile market with a turnover of almost 200 million euros in 2021.

The day after its meeting with unions, TotalEnergies (+2%) said it had told them it was ready to consider a budget for 2023 pay rises based on 2022 inflation.

In addition, the Group announces the allocation of a special bonus of one month’s salary to all its employees worldwide, to be paid in December, subject to salary agreements in the various countries and subsidiaries concerned.

Oddo BHF reiterates its “outperformance” view on Sodexo with a price target raised to €82.92 as the catering and services group hosts an Investor Day (CMD) in Paris on November 2nd.

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