This first half of 2022 went down in history as one of the worst ever recorded Cac 40 market news

The just-concluded semester went down in history as the third worst first semester of Cac 40 (-17.2% vs. -17.43% in the first half of 2020 and -21% at the end of June 2008). Today, the index lost 1.8% to 5922.86 points, which is almost 20% less than the record level in early January. Those who still wondered if the sharp rise in Cac 40 of 3% on Friday could be explained by what the stock market calls a “dead cat bounce,” a rebound in the bear market, have their answer today.

Fears of a recession have intensified in recent days in light of the latest data released and the determination of central banks – confirmed yesterday – to raise interest rates, despite the risks of recession. Investors are scared “That the ongoing increase in inflation rates will not lead to a recession, and this topic continued yesterday, Fed Chairman Powell, ECB President Ms. Lagarde and Governor of the Bank of England Bailey reaffirmed their intention to return inflation to the target level during a panel at the ECB Forum”, explains Jim Reid, strategist at Deutsche Bank. The annual symposium of the European Central Bank was held in Sintra, Portugal, until Wednesday evening.

Inflation has set a new stock market record

Yesterday, US Federal Reserve Chairman Jerome Powell acknowledged that there is a risk that the Fed may go too far by raising the rate, which will cool economic activity more than desired, but this risk is not the most important. The worst-case scenario for the economy would be if the central bank could not restore price stability.

Jerome Powell and Christine Lagarde also warned yesterday against the increased risks associated with inflation, which promises to be consistently high, which prepares investors for the times. “hurt”. In France, consumer price inflation reached a new record this month – 6.5% per year according to previously agreed data of the European Union, which allows us to compare with other countries. Although, according to data released yesterday, Germany has experienced a temporary respite from inflation (thanks to two government measures: a reduction in fuel taxes and the introduction of reduced fares), inflation statistics for the euro area as a whole, to be published tomorrow, should also reach new levels. highs (8.5% per year, according to consensus economists Bloomberg). In Spain, figures released yesterday showed that inflation in the agreed data this month reached 10% (+1.5 points compared to May).

Energy dependence on Russia is one of the main causes of inflation shock in Europe. Today the price of contracts forward One month of gas for the European Reference Exchange (Rotterdam Stock Exchange) has returned to its extraordinary level of three months ago, more than 149 euros per megawatt-hour (+ 8% almost), after rising by more than 6% yesterday after the compressor failure at the Norwegian field of Martin Linge, which led to a reduction in production in conditions of already difficult supply, and Russia reduced its supplies in response to sanctions. German gas and electricity supplier Uniper (-14% on the Frankfurt Stock Exchange) said today that it had received only 40% of the gas volumes agreed with Gazprom. Due to this situation, the group, which is in a difficult situation, is forced to buy at exorbitant prices the capacity needed to provide its customers.

Banks were tested for recession

The European Central Bank is expected to raise interest rates for the first time in eleven years in July. Although the recession is not a central scenario for the ECB, the banking supervisor responsible for ensuring the soundness of credit institutions announced today that commercial banks will have to take this risk into account to calculate their soundness. Too fragile a bank will not be able to pay dividends. General Societythe most fragile of the French banks, fell more than 6%.

In general, the companies most affected by the state of the economy suffer the most from the stock market. Renault fell again by almost 3%. Those who have large debts, for example Alstom (-8%) also fell.