falls beneath 5,800 (annual low), E/$ at 0.9700

( – The Paris stock market could end near the low of the day, which will also be a yearly low, the CAC40 will fall -2.3% to 5,780 (starting to look like a ‘sell-off’ ): the index has lost over the past week more than -4.8%.
Volume is not impressive (2.2BnE), while such declines generally imply trades above 4BnE.

The decline accelerated this morning following the release of the latest PMI survey on private sector activity in Europe.
The Euro-Stoxx50 and DAX fell by more than 2.1% and 1.8% respectively as investors were stunned by the latest European PMIs.
The London Stock Exchange also lost ground with a fall of -2.1%.

The contraction of the Eurozone economy deepened in September, against the backdrop of heightened inflationary pressures.
The latest PMI survey released by S&P Global on overall activity in the region thus fell to 48.2 this month, from 48.9 in August, the research office said: a new 20-month low.
In France, the preliminary composite index measuring overall activity in France rebounded to 51.2 this month, up from 50.4 in August.
With rising energy prices, rapidly rising interest rates and slowing global growth, the Eurozone composite PMI fell below 50 points in August.

This is why the CAC40 seems the most overlooked this Friday: according to analysts, a break of 5,980 points on the CAC could signal a return to the bottom of 5,795/5,800 points, which in turn could lead to a retreat of the annual threshold of 5,750 points, which acts as an ‘attractive force’ to let’s use the words of the Kiplink Finance teams.

In New York, US stock markets are down -1.5% to -1.7% (Dow Jones at 29,600, S&P500 below 3,700… Nasdaq down -1.8% to 10,850) as rates continue to tighten: The US 10-year T-Bond jumped to 3.80% this morning, the highest since the 2008 financial crisis… but the decline on Wall Street is fueling ‘risk-on’ buying and the yield is falling back to 3.71% (unchanged).

Inflation, which is slowly normalizing, remains a major source of concern for the Federal Reserve, at the risk of dragging the economy into recession.
One of the ‘facts of the day’ is the new record set by the dollar (+1.4%) around 0.9700 against the euro… which invites us to question both the geopolitical context and the economic outlook.

The yield of our OATs still rose to around 2.67% and Bunds to 2.11% (a 9-year record), but the fear of new dramatic developments on the geopolitical front (large mobilization in Russia) also encourages arbitrage in favor of the asset. a safe haven.
Our OATs are back by 2.58%, Bunds by 2.02%, or +4 points ‘only’ (compared to +13 this morning).
Italian BTPs do not benefit from this with a deterioration of +11 points to 4.31% (high 4.367%), investors fear that the EU will take retaliatory measures if Italians ‘vote badly’, as Ursula von der Leyen stated in the half – in other words, in an attempt to interfere with the democratic voting in Europe with serious and unprecedented threats.

The day was also marked by the publication of the US PMI, which remains anchored in the danger zone, confirming the reality of the recessionary threat across the Atlantic.
The U.S. private sector slowed its contraction slightly in September as orders returned to growth, according to a PMI survey released Friday by S&P Global.

The composite index was 49.3 this month, compared to 44.6 in August, but it is still in the contraction zone.

In the services sector, the ‘flash’ PMI rose sharply to 49.2, after 43.7 in August, well above the consensus target of 45.
The manufacturing PMI rose to 51.8 from 51.5 last month, again beating economists’ projections that had targeted an average of 51.3.

For Chris Williamson, chief economist in charge of research, these figures – and in particular the modest growth in new orders – are likely to ease concerns about the current pace of the economic slowdown.

On the value side, with rising rates, the automotive sector lagged -11 on Faurecia, -10% on Valéo, -6.5% on Renault.

This morning, L’Oréal announced the signing of an agreement to acquire Skinbetter Science, an American skin care brand. Skinbetter Science had over $95 million in revenue in the trailing twelve months to July 31, 2022.

Canadian fund Mawer Investment Management believes that Schneider’s offer for Aveva underestimates the value of the British group, according to the Financial Times. Mawer Investment Management plans to reject Schneider’s 3100p takeover bid according to the FT saying “it is an opportunistic bid that has taken advantage of the share price weakness over the past few months”. M&G Investments could also reject the offer according to the FT.

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