The control room of Euronext, the company that manages the Paris Stock Exchange (AFP / ERIC PIERMONT)
The Paris Stock Exchange faltered again at the end of the session on Wednesday, recording a sixth consecutive decline, the enthusiasm of the luxury sector is not enough to overcome the fears of recession against the background of the prospects for tightening of the monetary policy of the US Federal Reserve.
On the one hand, the session was supported by “a favorable wind with rather good results”, such as those of the luxury giant LVMH, and on the other, the continuous rise in interest rates on the debt market and the price index to manufacturing (PPI) in the United States acted as a “headwind,” Lionel Melka, research director at Homa Capital, told AFP.
The PPI index climbed again last month to + 0.4% versus -0.2% in August and + 0.2% expected, suggesting that inflation is far from under control and putting pressure on the market again. Federal Reserve (Fed) to raise its benchmark rates.
This statistic does not bode well for the rise in consumer prices (CPI) to be released on Thursday. Analysts forecast inflation at an annual rate of still above 8% for the seventh consecutive month.
Over the course of a year, however, the rise in prices slowed to 8.5%, compared to 8.7% the previous month.
These data show that “we are not quite out of the inn” when it comes to inflation, notes Mr. Melka.
The US Federal Reserve (Fed), which will publish the minutes of its latest monetary meeting in the evening which should provide details on the state of mind of its monetary policy committee before a new meeting in early November.
With the statements in recent days, Fed members have increasingly dampened investors’ hopes of an early exit from the current tight monetary policy.
Risk factors have increased significantly in recent months on the markets. They face growth deceleration prospects combined with tightening financial conditions by central banks in an attempt to curb inflation and a worrying geopolitical situation.
At the top of the CAC 40 index, the world number one in luxury LVMH rose 1.87% to 621.90 euros after the announcement of a turnover of 19.75 billion euros in the third quarter and its confidence ” in pursuit of growth “despite the economy and geopolitical context. Since January 1st, the stock has lost more than 14%. In its wake, Hermès gained 1.82% to 1,284 euros.