(News Bulletin 247) – The Paris Stock Exchange is expected to continue its decline on Wednesday morning following the publication of several unreassuring economic indicators that raised the specter of a recession.

Around 8:15 a.m., the ‘future’ contract – April delivery – on the CAC 40 index dropped 15.5 points to 7339.5 points, suggesting a small bout of weakness at the opening.

After gaining up to 0.6% yesterday and briefly reaching 7400 points, the Paris market had sold its gains in the second half of the day to conclude the session with a symbolic decline of 0.01% to 7344 points.

While the CAC seemed to be heading quietly for a seventh consecutive rising session, the index was quickly overtaken by renewed caution which ended up reversing the trend.

Whether in Europe, on Wall Street or in Asia, the stock market trend continues to be affected by the signs of a global economic slowdown which is taking shape more and more clearly.

On the side of the US economy, investors learned yesterday of a further decline in industrial orders in January, instead of the expected increase.

Meanwhile, the JOLTS survey showed job openings in the United States fell below 10 million in February, to their lowest level since May 2021, suggesting a slowdown in the labor market.

As a result, risk aversion has once again taken over among investors, to the detriment of equities, against a backdrop of fears of recession and a rise in the VIX, the famous ‘barometer of fear’ in New York.

Another noteworthy element, the market context was characterized by a movement of sector rotation which favored the most defensive stocks on the stock exchange.

‘In other words, it is an ultra-classic configuration that arises when fears of a recession intensify’, underline this morning the analysts of Danske Bank.

‘We are therefore in a very different situation from that of the three weeks which saw the erosion of confidence in the banking sector being the first factor in the market downturn’, they add.

This pessimism logically weighs on the sectors most exposed to growth: yesterday, on Wall Street, it was the sectors of industry, basic materials and energy which suffered the most marked declines.

These disappointing statistics also shook the bond market, which suffered a sharp trend reversal after the US factory orders figures.

On the other side of the Atlantic, the yield of ten-year Treasuries erased 10 points in a few minutes before continuing to relax gently to return towards 3.33%.

On the foreign exchange market, the dollar lost ground against other major currencies to move to a new low of one month.

While the general climate remains dominated by worries linked to growth, the participants will closely follow, in the morning, the figures for industrial orders in Germany and industrial production in France.

Still on the macroeconomic level, investors will watch the publication, again in the morning, of the purchasing manager surveys (PMI) on activity within the euro zone.

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