Paris stocks closed sharply 0.95% lower on Thursday as pessimism on Wall Street spread across Europe after the release of strong economic indicators revived fears about monetary tightening.
The CAC 40 star index fell by 62.27 points to 6,517.97 points, after a start to the session, however, in the green. The day before, it had gained 2.01%, in its best session since Nov. 4.
US gross domestic product (GDP) growth in the third quarter was revised upwards, we learned Thursday, and came in at 3.2% at an annualized rate, which surprised analysts. This figure had already been revised upwards.
Household consumption between July and September was higher than initially estimated, as was non-residential fixed investment, the Commerce Department said.
“It is paradoxical but the market is waiting for bad news on the US economy”, to materialize investors’ hopes of seeing the US Federal Reserve change its monetary policy tone, explains Charles de Riedmatten, equity manager of Myria AM.
“The data is still very strong, so we risk continuing on a rate hike pace meeting after meeting,” he adds.
Even in Europe the determination of central bankers is not weakening: “50 basis point increases could become the new norm in the short term” and “for a while”, reiterated the vice president of the European Central Bank Luis de Guindos.
“The measures taken so far will have an effect on inflation, but we need to do more,” he warned.
Investors also reacted negatively to lower-than-expected results from semiconductor maker Micron, which posted a 38% decline in revenue and a net loss in the first quarter of its staggered fiscal year.
“Micron is at the end of the chain, so this confirms a slowdown in orders and therefore a slowdown in the economy,” comments Charles de Riedmatten.
The volumes traded on the CAC 40 did not exceed 2.5 billion euros, a low level which could amplify the variations.
The car slips
Economy-heavy stocks took a hit on Friday, a sign that recession fears are very much on investors’ minds.
The automotive sector fell in particular: Renault ended up in last place in the CAC 40, down 3.72% to 31.21 euros. Stellantis loses 3.22% to 13.11 euros, Valeo 4.49% to 16.50 euros and Faurecia 3.40% to 13.50 euros.
Other industrial stocks suffered, such as Schneider Electric (-2.30% to 130.84 euros) and Legrand (-2.11% to 75.04 euros).
Orpea still amortized
The share of the group of private nursing homes Orpea fell by 5.26% to 5.79 euros. Orpea nearly doubled the expected amount of its asset write-downs on Wednesday, to a level of between €5 and €5.4 billion, versus €2.1-2.5 billion previously forecast.
The stock is down 93.42% since the start of the year, the largest drop in 2022 for SBF 120 values, due to the scandal over the treatment of its residents.
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