The Paris Stock Exchange is heading towards a near-year low and its flagship Cac 40 index is furthermore on track to end its worst week since March 2020 during the first lockdown. The war in Ukraine took a new turn with the capture by Russian troops of the largest Ukrainian nuclear power plant in Europe in Zaporozhye.
At the European level, all Stoxx 600 industry indices are in the red, starting with cars (-4.9%) and banks (-4.1%). ” Nobody buys a new car when the price of raw materials goes through the roof. summarizes Michael Hewson, chief market analyst at CMC Markets. Banks, for their part, are dragged down by the desire for safe havens, which is driving down bond yields. The 10-year US bond rate fell 6 basis points to 1.7820%, while the price of German bonds with the same maturity returned into negative territory to -0.0350%.
mid session, Bedroom 40 fell 3.26% to 6,170.06 points after a low of 6,125.83, a level not seen since April 2021. The index is now down 9% for the week, its worst weekly performance since March 2020 (-19.86%). The volume of business is particularly significant, with 2.4 billion euros traded on the index.
Contracts future March US indices lost about 0.7%. Note that the Moscow Exchange will be closed for the fifth day in a row, which will be the longest series in modern Russian history.
No radioactive leak according to IAEA
Ukrainian emergency services reported this morning that a fire that broke out overnight near the Zaporizhzhya power plant after Russian bombing has been brought under control. The safety of the station’s reactors is not at risk, there is no leakage of radioactive substances, said the director of the International Atomic Energy Agency (IAEA). But the world remembers the Chernobyl disaster in April 1986.
This atmosphere of growing uncertainty highlights the degree of volatility in the market, and the V2X index, which measures the implied volatility of the Euro Stoxx 50, hit 47.34 this morning, breaking the 45 threshold for the first time since June 2020.
Players are again turning to safe-haven assets such as sovereign debt, which sent gold down, meanwhile hitting a 2-day high at $1950.88 an ounce before falling back to 1948.20.
In this context, the US jobs report, which is usually an event, is in danger of receding into the background. However, it should reflect the strength of the labor market, with 423,000 jobs created in February after 467,000 in January. The unemployment rate is expected to fall by 0.1 points to 3.9% of the active population, and the average hourly wage was expected to rise by 5.8% for the year from 5.7% in the previous month. ” Does it really matter? Not unless the numbers are surprisingly low. What does matter is the average hourly wage, which is expected to rise by 5.8% year on year, the highest level since 2007, except for two reports distorted by the pandemic in 2020. Ipek Ozkardeskaya, an analyst at Swissquote, commented.
Automotive sector remains under pressure, Thales still wanted
Michelin inferior to 6.8%. The tire manufacturer has taken the decision to suspend production for a few days at some European plants due to supply issues due to the crisis in Ukraine.
Renault lost another 6.1%, bringing it down over 16% for the week due to its presence in Russia, its second market. Valeo down 5.6% as Berenberg cut its target price for an automotive supplier from €34 to €25.
Elior lost 6.5% the day after the unexpected announcement of the resignation of its CEO Philippe Guillemot with immediate effect. Citi also downgraded the food service group from Buy to Neutral.
VGG flounder 1.7%. However, the group expects its turnover to grow by around 10% this year and an increase in gross operating profit (Ebitda) after 2021 is marked by a strong fourth quarter.
Universal Music Group (UMG) lost 5.8%. The music publishing group posted sharply higher results and confirmed they are well positioned to reach their mid-term goals.
against the trend Thales rose another 1.5%, bringing growth to 17.8% in a week thanks to renewed interest in the defense sector.