(News Bulletin 247) – After the debacle of SVB and two other American banking establishments, it was Credit Suisse’s turn yesterday to shake up the main European markets, carried away by the banking / insurance / asset management sector. The CAC fell 3.58% to 6,885 points, in a very busy level of activity.
The Swiss establishment suffered a violent stock market plunge, losing more than 30% during the day, before climbing back up the slope a little to close at -24% (the worst fall in its history on the stock market). The earthquake originated in statements by the President of the Saudi National Bank, Ammar Al Khudairy. The latter declared on Bloomberg TV that it was out of the question for his group, the largest shareholder of Credit Suisse with nearly 10%, to inject liquidity into the Swiss bank if it were to need it. The Swiss National Bank has said it is ready to help the emblematic banking institution.
In Paris Axa fell by 5.14% to 26.29 euros, Amundi by 5.71% to 54.45 euros, BNP-Paribas by 10.11% to 52.03 euros and Société Générale by 12.18% to €21.49. In general, a large fringe of cyclical files were attacked, like, without being exhaustive, Rexel (-6.70% to 21.85 euros), Air France (-8.56% to 1.553 euros), Eramet (-8.94% to 91.15 euros), Valeo (-9.50% to 17.95 euros), Alstom (-10.45% to 23.23 euros), Faurecia (-11.89% to 18 86 euros) and Vallourec (-13.90% to 11.30 euros), the red lantern of compartment A of the rating.
It is in this heavy atmosphere that operators will have to turn today to Frankfurt where the ECB will complete a new Board of Governors. Ms. Lagarde will have to lend herself to “a balancing act”, in the words of Axel BOTTE, international strategist at OSTRUM AM. “uncertainty [étant] up a notch with the American bank failures. Market expectations for monetary policy have shifted wiping out nearly 50-75bps of tightening by June in a few days of turmoil.”
“Ms. Lagarde will have to comply with the mandate and renew her commitment to fight inflation without adding to the ambient volatility. Reassuring words on the state of European banks and implicit support for the banking system when needed would be welcome for “ sweeten the pill” by 50 bps but an accommodating reversal would be a very bad signal.”
Verdict at 2:15 p.m. for the European monetary policy decision itself and at 2:45 p.m. for the press conference.
In the statistical chapter yesterday, note a collapse of the manufacturing index of the NY Fed (Empire State Index), going from -7.9 to -24.6.
On the other side of the Atlantic, the main equity indices ended in mixed order, the Dow Jones falling 0.87% to 31,874 points and the Nasdaq Composite managing to extricate itself into green territory (+0.05% at 11,434 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, fell 0.73% to 3,891 points.
A point on the other risky asset classes: around 08:00 this morning on the foreign exchange market, the single currency was trading at a level close to $1.0610. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $67.70.
To be followed as a priority on the macroeconomic agenda this
KEY GRAPHIC ELEMENTS
The 7,000 symbolic points, which we put under close surveillance, shattered on Wednesday, in very impactful volatility and activity conditions. The difference of 262 points, between the high points (opening incidentally) and the low points (close to the close yesterday) testifies to a massive and continuous mobilization of the selling camp throughout the session. We are at the heart of a corrective movement that has not reached its climax.
FORECAST
In view of the key graphic factors that we have mentioned, our opinion is negative on the CAC 40 index in the short term.
This bearish scenario is valid as long as the CAC 40 index is trading below the resistance at 7225.00 points.
The News Bulletin 247 board
Hourly data chart
Chart in daily data
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I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
