(News Bulletin 247) – The CAC 40 is falling mid-session this Tuesday, the rise in bond yields precipitating the decline in the stock markets.

Defending the 7000 points risks becoming more and more difficult for the CAC 40. The flagship index of the Paris Stock Exchange continues its decline this Tuesday, losing 0.4% to 7041.57 points at mid-session, after having lost 0.9% the day before.

Risk appetite is still weighed down by the rise in bond rates. The yield on the 10-year US bond now exceeds 4.7%, at 4.704%. This sudden increase also worries JP Morgan strategists.

“If rates continue to rise as they are, there will be a financial accident. Something will break and the Fed will act in the other direction (towards a rate cut, editor’s note),” declared Monday evening on Bloomberg TV David Lebovitz, global market strategist at JP Morgan Asset Management.

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The absence of “shutdown” which propels rates

Deutsche Bank attributes the rise in rates in recent days to the absence of a “shutdown” (closure of the American federal administrations due to lack of agreement on financing) in the United States, which increases the probability of seeing the American Federal Reserve (Fed) to increase its key rates once again.

“For example, futures increased the probability of a hike at the next November meeting from 19% on Friday to 28% yesterday (Monday, Editor’s note). As for the prospect of a hike in December, it is increased from 39% last Friday to 51% at yesterday’s close,” explains the establishment.

Furthermore, continues the German bank, the September ISM manufacturing index in the United States was better than expected, reinforcing the idea that the American economy is resilient. And several members of the Fed confirmed, during their latest interventions, the idea that high rates were set to last for a long time.

This Tuesday, investors will follow job openings in the United States which will be published at 4 p.m.

Sanofi is making progress

On the stock side, Sanofi rose 1.2% after announcing that it was joining forces with a subsidiary of Johnson & Johnson to develop and market a vaccine candidate against extra-intestinal pathogenic E.Coli strains.

Tech fell back with rate increases, Worldline lost 2.4% and Capgemini lost 1.7%.

The headline of the day is signed by Vantiva which jumped 20.5%. The former Technicolor announced the acquisition of part of the activity of the American CommScope, a specialist in connected homes, in exchange for a 25% stake.

On other markets, the euro is stable against the dollar, at 1.0482 dollars. Oil contracts are falling. That of December on Brent from the North Sea fell by 0.65% to 90.12 dollars per barrel, while that of November on WTI listed in New York dropped 0.6% to 88.29 dollars per barrel.