CAC 40, Nasdaq, Dow Jones, DAX, Euro Stoxx 50, FTSE … The stock market has been in trouble lately. And new turbulence is far from being excluded. Inflation, which has literally shot up in recent quarters, has recently turned out to be worse than expected in the US and Germany. As for long-term interest rates, they have exploded upwards in recent months, against a backdrop of accelerated hikes in central bank policy rates.
A phenomenon that makes the Actions, in particular technology or growth stocks, the most sensitive to the trajectory of interest rates. The foreign exchange market is volatile, with a surge in the dollar and a historic collapse in the pound. As for listed companies, they could disappoint on their profits in the coming quarters as the specter of recession looms, “given the dramatic deterioration in investor and consumer sentiment,” warns Thomas Fonsegrive, partner of Marigny Capital, interviewed by Capital. In a context that has become more uncertain for the stock ExchangeHere are the risks to monitor this fall, according to the expert.
Stock market investment: can you limit the risks on your PEA?
In the face of rising inflation and rising uncertainty, consumer behavior should be monitored
While the rate of increase in consumer prices is very high, “consumers, irritated by the increase in the price of goods and services, may decide to postpone their purchases and save, especially since visibility for the next few quarters is poor” notes Thomas Fonsegrive. , who underlines that the risk is that of a shock to consumption, the backbone of the euro area economy. A phenomenon that the ECB tries to avoid. In this more uncertain environment, consumer confidence and retail sales indices need to be kept in mind.
United Kingdom: The continuing explosion of inflation raises fears of an economic and social shock
UK households are in trouble, strangled by rising energy prices and steeply rising inflation, further aggravated by the appreciation of the pound, which automatically makes imported goods more expensive. “The situation in the UK is a real risk and on our doorstep,” Judge Thomas Fonsegrive. Although their savings are low, British citizens see their purchasing power reduced. Inflation is expected to rise above 20% within a few months of Goldman Sachs, and families “have little absorption capacity”, denounces the expert, who fears social unrest and an impact on the British economy.
Stock market: stocks and sectors to be favored in the long term
Interest rates: the ECB will monitor the evolution of unemployment in the eurozone
Faced with soaring inflation, the ECB has turned its back on ultra-low interest rates, tightening the screws several times. And it should tighten its monetary policy further. “The euro zone central bank should not consider an inflection on its key rate (ie a less stringent monetary policy, ed) before the unemployment rate clearly follows the path of the increase”, judges Thomas Fonsegrive. Equity investors may therefore have to face their problems with patience …
Faced with high inflation, listed companies are likely to disappoint on their profits
So far, publicly traded companies have generally not disappointed equity investors, with semi-annual accounts released this summer showing that, overall, they have managed to pass price increases to consumers in the face of rising inflation (which increases their costs). . If that were to change, corporate profits could therefore disappoint. “If listed companies are no longer able to pass on the additional costs associated with inflation to their customers, they will lay off workers,” predicts Thomas Fonsegrive. If that happens, the unemployment rate should rise, which could encourage the ECB to be less strict (see previous point), according to him.
War in Ukraine: a particularly uncertain duration
At the time of writing, the war in Ukraine shows no signs of abating, despite calls from Russian allies to find a solution to the conflict. Vladimir Putin has just extended the mobilization. “The duration of the war in Ukraine is very uncertain. The conflict could last a few months or a few years. in reversenot even the scenario of a rapid end to the crisis can be ruled out. In this favorable case, the stock Exchange it would benefit from an upward shock, in a context of foreseeable easing of energy prices and inflation, ”says Thomas Fonsegrive.
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