Friday, September 22, 2023

The new rise in oil benefits TotalEnergies, very close to its all-time highs

The new rise in oil benefits TotalEnergies, very close to its all-time highs The Paris Stock Exchange gains some points in a nervous market. The rise in oil prices above $95 a barrel supports large caps in the sector in Europe while fueling fears about inflation and the response of central banks. On the macroeconomic front, Eurostat revised its inflation estimate downward from 5.3% to 5.2% year-on-year in August in the euro area, after 5.3% in July.

Excluding food and energy, the price increase was confirmed at 5.3% year-on-year, after 5.5% the previous month. The OECD, for its part, raised its global growth forecast for 2023, although it reduced it for 2024 to 2.7%, compared to 3% previously. With the exception of 2020, marked by the COVID-19 epidemic, this growth rate would be the lowest since the financial crisis.

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At mid-session, the Cac 40 rose 0.37%, to 7,303.38 points, in a symbolic turnover of less than 600 million euros. Futures contracts on American indices gained around 0.1%.

Towards an “aggressive pause” by the Federal Reserve?

The US Federal Reserve’s interest rate decision is on everyone’s minds as the central bank begins a two-day meeting of its Monetary Policy Committee (FOMC) on Tuesday. While economists do not debate the prospect of keeping the federal funds rate in a range of 5.25% to 5.5%, the term “aggressive pause” often comes up.

Observers will closely monitor the Federal Reserve’s new economic forecasts, especially the “dot plot,” a dot graph that illustrates FOMC members’ interest rate expectations. The main question is whether the FOMC will maintain its forecast for another 25 basis point hike by the end of the year, in the context of the number of rate cuts planned for 2024. In its June estimate, the Fed expected a one-point easing percentage next year.

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SMCP collapses after lowering its forecasts

Societe Generale lost another 0.6%, while Exane BNP Paribas downgraded the bank from “outperform” to “neutral” to now set a target of 28 euros, compared to 40 previously.

TotalEnergies gained 1.5% after reaching a maximum of 63.01 euros, compared to its historical record of 63.40 recorded in 2007. The barrel of Brent reached a new ten-month high this morning at $95.33, before it returned to 94.95. Some traders are betting on a barrel jump to more than $100 next week.

Renault and Stellantis gained 2.7% and 1.7% respectively, after the 1% increase in the automobile Stoxx 600, which marks the best sector performance in Europe.

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SMCP falls more than 27%. The ready-to-wear group revised its forecasts for this year downwards and expects mid-single-digit sales growth at constant exchange rates.

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