(CercleFinance.com) – The Paris Stock Exchange confirms its decline: after losing 1.2% the day before, the Paris index lost 2% this afternoon, about 6230 points.
The downturn on Wall Street is expected to continue on Thursday morning. Futures contracts on major New York indexes fell about 1%, declining after the previous day’s fall.
Investors are still looking for the right position in the face of rising Federal Reserve rates and the problem of global growth due to recent quarantines in China.
This new volatility in the markets caught many investors by surprise, forcing them to admit that the low volatility regime that has prevailed in recent years is now over.
The rise in the VIX, known as the “fear index”, is a good illustration of the prevailing nervousness: the index jumped more than 18% yesterday to return above the 30-point threshold. We will remind, say that the market is quiet below 20 and nervous above 30.
This return to volatility forces market participants to reconsider their asset allocation strategies without even knowing which way to go.
“Will high inflation or the central bank’s efforts to contain it are about to cause a recession?” Asks Joseph W. Amato, Neuberger Berman’s director of equity investment.
“Can governors ensure a soft landing?” – the manager continues. “And have stock markets fully assessed these risks?” He asks.
In the bond market, the yield on 10-year Treasury bonds is also very volatile, falling to about 2.88% after a few days of turnovers and peaks reached last week.
According to Aurel, the less aggressive, less “hawk” discourse of the Fed simply did not listen to investors. In addition, “the ECB is concerned about the impact of the deteriorating European economy and market volatility on the balance sheets of European commercial banks,” – said the investment company.
Now, deprived or almost of results, investors will have to use a compass of indicators to navigate the markets looking for direction.
This Thursday, the focus will be on the publication of several US performance indicators, including the leading Conference Board indicator.
Investors have pointed to manufacturing activity in Philadelphia, which continues to grow overall this month, but at a much slower pace, according to the local Fed index, which fell 15 points in May to 2.6, the lowest level in two years.
On the agenda of indicators is also still in the US, registration for unemployment benefits. The number of weekly unemployment claims increased in the week of May 9 in the United States from 218,000 to 197,000 (revised) a week earlier.
In the news, French companies EDF announces that it is adjusting its estimate of nuclear production for 2022 to 280-300 TWh against 295-315 TWh earlier, while several reactors have closed due to the phenomenon of stress corrosion affecting parts of the pipes nuclear reactor.
Societe Generale announces the completion of the sale of Rosbank and its insurance subsidiaries in Russia to Interros Capital, an agreement announced on April 11, which will record a net loss in the income statement of approximately 3.2 billion euros.
Eurazeo reports an increase in its assets under management of 41.5% in 12 months to 32.2 billion euros, while quarterly revenue increased by 31% (ptcc) compared to the same period twelve months earlier.
The British Competition Authority announced on Thursday that it was concerned about the economic consequences of the merger of Veolia and Suez. The Office for Competition and Markets (CMA) notes that its in-depth investigation has shown that the merger of the two French groups could lead to less competition in the waste and wastewater treatment market in the United Kingdom.
Vallourec announced sales of 916 ME in the first quarter, which is 30.5% more than the same period a year earlier, due to an increase in shipped production by 10.3% to 395 thousand tons.