(News Bulletin 247) – The Paris Stock Exchange had five sessions in the red this week, weighed down by disappointing economic indicators and restrictive speeches from the side of the Fed.

It’s clearly a week to forget for the CAC 40. The Parisian index has chained five sessions in the red since Monday. This Friday the CAC 40 lost another 0.55% to 7163.42 points. Over the week as a whole, the great barometer of the Paris Stock Exchange lost 3.05%, its largest weekly decline since the week ending on March 17 (-4.09%), during the mini- crisis which then shook the entire banking sector.

“The past week has been excruciating for equities,” said Edward Moya of Oanda.

The market was weighed down this week by the absence of announcements of stimulus measures from the Chinese government as well as by the speech considered restrictive by Jerome Powell, the chairman of the American Federal Reserve (Fed). The central banker spoke on Wednesday and Thursday before committees of both chambers of the US Congress, and confirmed that rate hikes were in sight. “Thursday he had a slightly more aggressive speech, explaining that inflation had certainly fallen, but that this fall was more linked to energy and less to monetary policy, which therefore still has to produce its effects”, explains Alexandre Baradez, head of market analysis for IG France.

The Bank of England raised its key rates to a greater extent than expected by the market, with an increase of 50 basis points (0.5%) on Thursday.

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Drop in service activity in France in June

This Friday, disappointing PMI indices weighed on the trend. The June PMI indices, which measure private sector activity, came in below expectations for the euro zone. The composite index stood at 50.3 in June against 52.8 for the previous month, a figure below expectations, underlines Capital Economics. The 50 level marks the boundary between a contraction and an expansion in activity.

“The big surprise comes from the drop in France’s PMI services index, which fell from 52.5 in May to 48 in June, while this sector had been resilient until then, which is starting to show the bite of monetary policy. of the European Central Bank”, explains Alexandre Baradez.

In the United States, the composite PMI index fell back to 53 at least in June, also marking a slowdown compared to May (54.3).

Beyond the PMIs, “the latest data has heightened fears of a potential recession, which has further reduced risk appetite”, explains Deutsche Bank, citing the rise in weekly jobless claims in the United States, as well as the fall in the Kansas City Fed manufacturing index. “Investors therefore found themselves with a multitude of bad news to digest, without any sign of a positive catalyst in the short term”, continues the German bank.

Stock market torture for SES-imagotag

As for values, SES-imagotag plunged (-58.3%) after accusations of accounting irregularities from Gotham City Research, a fund that is betting on the stock’s decline. The company responded on Thursday evening, saying the fund’s report contained “gross inaccuracies”, reserving the right to take legal action.

It was a tough session for airlines, with Air France-KLM down 5.6%, easyJet down 4.7% and IAG down 3.4% in London, Lufthansa down 2.7% in Frankfurt and Ryanair down 2, 5% in Dublin. Asked, several analysts did not see any information on the sector that could explain these releases. One of them, however, mentions the deterioration of the economic situation and the macroeconomics which could explain profit taking in a sector which has behaved well since the start of the year (+35% for the Stoxx Europe Total Market index). Airlines).

Note the gadin in Frankfurt of Siemens Energy (-37%) which had to abandon its profitability target for 2023 due to quality problems on wind turbine components at its Spanish subsidiary Siemens Gamesa.

On the other markets, the euro lost 0.6% around 5:50 p.m. against the dollar, at 1.0887 dollars, undermined by the PMI indices in the euro zone. Oil prices are falling. The August contract on Brent from the North Sea fell 0.8% to 73.62 dollars a barrel, while that of the same expiry on WTI listed in New York yielded 0.89% to 68.92 dollars a barrel .