CAC 40: The fight against inflation is far from over for the Fed, CAC 40 is disillusioned

(BFM Bourse) – The Paris stock market is down for a third session in a row, punished by Jerome Powell’s comments on further rate hikes, while UK inflation remains at a high level in May. The CAC 40 ended Wednesday evening down 0.5%.

Just below midday, the Paris stock market extended its decline after the first semi-annual hearing of the chairman of the US central bank before Congress. Jerome Powell has correctly estimated that the Fed’s policy rates will still take the upward slope in the coming months, even if the rate of increase should be less sustained than in the past.

This nuance did not convince investors, as evidenced by the orientation of the indices on both sides of the Atlantic. The CAC 40, which lost up to 0.7% at the day’s high, ended up 0.46% at 7260.97 points. On Wall Street, the mood is a bit grim, especially on the Nasdaq, which lost more than 1.4%, or the S&P 500 (-0.5%) at the close of the European stock markets.

Inflation was also discussed this Wednesday morning with the UK figures. Prices on the other side of the channel show no signs of calming down in May, contrary to the expectations of analysts and countries in the eurozone. Inflation held steady last month at 8.7% year-on-year, with consensus expecting a modest drop to 8.4% on average.

This persistent inflation calls for further tightening by the Bank of England, resulting in a 13th consecutive rate hike. On Thursday, the British institution will decide on a likely development of its monetary policy to curb inflation

Movement in the casino capital

In terms of values, Renault limits its gains to 0.8%, while Stellantis closes down to a symbolic 0.1%. The two automakers are benefiting from the announcement of an 18.20% year-over-year increase in new car registrations in Europe, according to the Association of European Automobile Manufacturers.

Casino ends the day on top of the SBF 120 (+11.3%). A concert of shareholders led by Fimalac announced that it had increased to more than 12% of the capital of the capital of the Saint-Etienne company in great difficulty, according to a statement to the Financial Markets Authority.

Regarding small and mid-caps, Hoffmann Green Cement (+8%) announces the signing of an agreement with Shurfah Holding, which defines the main principles of an exclusive license agreement with a view to building four Hoffmann units in Saudi Arabia.

Elsewhere, the euro rose 0.25% to $1.0952. Oil is on the way up again. The August North Sea Brent contract jumped 1.6% to $77.11 a barrel.

Sabrina Sadgui – ©2023 BFM Bourse

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