The Paris Stock Exchange closed in the red again on Wednesday, losing 0.98%, weighed down by a less good than expected indicator on the American labor market, and the weakness of the Chinese economy which is penalizing luxury stocks.
The leading CAC 40 index fell by 74.13 points to 7,500.97 points. On Tuesday, it had also fallen sharply, losing 0.93%.
Like all global markets, the French index was marked by the publication of the monthly JOLTS survey, which reported new job offers on the labor market in the United States.
In detail, the survey reported 7.67 million new job offers in July on the American labor market, the lowest since January 2021. This figure is well below expectations: a consensus of economists surveyed by Bloomberg was counting on 8.10 million new positions in July.
However, “a slowdown in the job market and the economy, with high rates, increases the risk of recession,” Clémence de Rothiacob, an analyst for Richelieu Gestion, explained to AFP.
In addition, the yield on 10-year US bonds briefly rose above its 2-year equivalent during the session, signaling the end of a period traditionally heralding a recession, a first since 2022.
The interest rate on ten-year French bonds stood at 2.93% compared to 3% at the close on Tuesday.
The US data has thus rekindled discussions on the extent of the rate cuts that will be made by the US Federal Reserve (Fed) at its monetary policy meeting in September. Market forecasts of “a 50 basis point cut (…) have continued to climb”, comments Chris Beauchamp, an analyst at IG.
“The markets are starting to fear that the rate cuts will come too late,” according to Clémence de Rothiacob, who believes that the “US employment report expected on Friday will be decisive.”
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China weighs on luxury
New, sobering data has been released regarding the Chinese economy, an important market for the luxury sector.
The PMI activity index, calculated by the S&P Global consultancy and the Chinese economic media Caixin, showed on Wednesday that activity in the services sector in China slowed in August with one of the weakest growth rates this year.
LVMH fell by 4.22% to 642.60 euros, Kering by 2.22% to 248.50 euros and Hermès by 3.84% to 2,081.00 euros.
Storm for semiconductors
Technology stocks related to artificial intelligence and semiconductors are suffering from expectations of a poor global economy.
In Paris, STMicroelectronics fell by 1.19% to 27.04 euros and Soitec lost 3.80% to 103.90 euros.
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