(News Bulletin 247) – The Paris Bourse dropped more than 3% on Thursday evening, back below 7100 points. A movement that accelerated after the excellent US private employment figures, which paved the way for further rate hikes from the Fed.

In four days, the Paris Stock Exchange has continued to sink floors. And this bearish streak accelerated on Thursday, with a particularly nightmarish session that saw the CAC 40 fall 3.12% to close at 7082.29 points.

It is therefore one of the worst of the year 2023, the session of March 15 having ended with a decline of -3.58%, in the midst of a storm on the banking sector.

The star index in Paris is bent under fears of an economic slowdown and rate hikes, which were reinforced by the minutes of the last meeting of the American Federal Reserve.

“The market is suffering from a double negative effect. For several days, the economic indicators have not been good, in Europe and Asia, as we saw again on Wednesday with the PMI Services. And moreover, the equity indices are penalized by the voluntarist and restrictive speeches of intent of the central banks which we already know (for the Fed, the American Federal Reserve, and the European Central Bank, the ECB) that they will certainly raise their rates in July. then the doubt about a second consecutive increase, doubt which will last until September”, develops Alexandre Baradez, head of market research at IG France.

Bond tension

And the excellent figures for private employment in the United States are fueling market tension. According to the ADP survey, the world’s largest economy has created 497,000 jobs in the private sector and are therefore twice as many as expected by the market.

This robustness of the American employment market is perceived as bad news by the markets, 24 hours before the publication of the official American employment figures. Analysts forecast 220,000 new hires against 339,000 in May with an unemployment rate of 3.6% against 3.7% the month before.

On the bond market, investors are therefore anticipating further increases in key rates by the major central banks. The US Federal Reserve and the European Central Bank (ECB) have already signaled that they expect hikes at their meetings this July.

All of the sovereign bond yields – that is to say the rates of the debts of the States – of the developed countries therefore exploded on Thursday and reached their highest for several months or even several years.

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Cyclical and rate-sensitive stocks in the hard core

In this context, all the stocks listed on the CAC 40 ended in the red and particularly the cyclical stocks. Technology stocks also had an atrocious session, STMicroelectronics dropped 5.1%, Capgemini returned 4.5%.

The same is true for real estate companies such as Unibail-Rodamco (-5.6%), bottom of the CAC 40.

Publicis, for its part, experienced a brief spike at more than 5% before falling back (-1.9% at mid-session), with speculation of a hypothetical interest from Vincent Bolloré via Vivendi, following a article of Challenges.

Euronext lost 4.4% as Deutsche Bank downgraded its recommendation from “buy” to “hold”.

Small positive point all the same: the IPO of the low-carbon water desalination specialist Osmosun was a hit with investors, the stock offer having been largely oversubscribed. The IPO price was set at 6.5 euros at the top of the indicative range previously communicated by the group. The IPO will take place next Monday.

On other markets, the euro gained 0.1% against the dollar at 1.0869 dollars. Oil prices are also regaining ground. The September contract on Brent from the North Sea lost 1.2% to 7,575 dollars a barrel, while that of August on WTI listed in New York yielded 1.1% to 71 dollars a barrel.