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A few weeks after the collapse of the Silicon Valley Bank (SVB), stock market indexes, and in particular the CAC 40, are experiencing a timid rise thanks to the banks and the luxury sector. Fears about the financial system seem to have eased, but it is still considered fragile. With a risk of recession looming across the Atlantic, earnings estimates are likely to be revised.
Almost a return to normal. The Paris Stock Exchange continues to rebound after recording a gain of 0.9% on Monday. At around 9:15 a.m. on Tuesday, the CAC 40 was up 0.74% at 7,130.42 points.
Contagion concerns related to the Silicon Valley Bank (SVB) bankruptcy and the Credit Suisse acquisition seem to have subsided for now. But while the market has erased its losses from Friday, it remains fragile and susceptible to negative reactions to any bad news.
This upward trend is supported in particular by the banks. BNP Paribas, Crédit Agricole and Societe Generale are experiencing increases ranging from 1.6% to 2.4%. Similarly, the luxury goods sector is seeing a rise in its stocks, with LVMH (+0.72%) and Dior (+0.63%) reaching new records.
Large industrial companies are benefiting from growth in France, which has helped reduce public debt. The public deficit fell more than expected and now stands at 4.7% of GDP. Alstom and Saint-Gobain posted an increase of more than 2%, while Valeo recorded an increase of 2.6%. The French automotive supplier filed 588 patent applications last year, according to the annual barometer of the European Patent Office published this Tuesday. This is the highest number of applications among French companies.
SVB’s bankruptcy on everyone’s mind
The regulatory authorities have given their support to the purchase of a large part of the deposits and loans of Silicon Valley Bank (SVB) by First Citizens Bank, which has calmed the markets somewhat. In addition, U.S. regulators are considering extending the deposit guarantee to allow First Republic Bank to strengthen its balance sheet.
Michael Barr, Vice Chairman of the Fed and Martin Gruenberg, head of the FDIC, the bank deposit guarantor, assured that the financial system is “strong and resilient”. Regulators will be questioned today at 4 p.m. by the U.S. Senate Banking Committee to discuss SVB’s situation, more than two weeks after its failure.
Risk of recession in the US
But the central banks could be forced to continue their monetary tightening policy to curb inflation, which raises the risk of recession on the other side of the Atlantic. The yield on the two-year U.S. bond has fallen back below 4%, to 3.9733%, but remains above the 10-year maturity, which is at 3.5270%. This inversion of the curve is often a harbinger of a coming recession.
The Fed will “keep rates high because it’s the only tool they have, the only tool they know will cause the economy to slow and inflation to fall”, commented Cheryl Smith of Trillium Asset Management on Bloomberg Radio.
Analysts at Morgan Stanley are forecasting a decline in stock valuations and earnings estimates due to the expectation of a recession that will limit the market’s growth potential.
Read also >Bankruptcy of the SVB : are we heading for a new financial crisis?
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A few weeks after the collapse of the Silicon Valley Bank (SVB), stock market indexes, and in particular the CAC 40, are experiencing a timid rise thanks to the banks and the luxury sector. Fears about the financial system seem to have eased, but it is still considered fragile. With a risk of recession looming across the Atlantic, earnings estimates are likely to be revised.
Almost a return to normal. The Paris Stock Exchange continues to rebound after recording a gain of 0.9% on Monday. At around 9:15 a.m. on Tuesday, the CAC 40 was up 0.74% at 7,130.42 points.
Contagion concerns related to the Silicon Valley Bank (SVB) bankruptcy and the Credit Suisse acquisition seem to have subsided for now. But while the market has erased its losses from Friday, it remains fragile and susceptible to negative reactions to any bad news.
This upward trend is supported in particular by the banks. BNP Paribas, Crédit Agricole and Societe Generale are experiencing increases ranging from 1.6% to 2.4%. Similarly, the luxury goods sector is seeing a rise in its stocks, with LVMH (+0.72%) and Dior (+0.63%) reaching new records.
Large industrial companies are benefiting from growth in France, which has helped reduce public debt. The public deficit fell more than expected and now stands at 4.7% of GDP. Alstom and Saint-Gobain posted an increase of more than 2%, while Valeo recorded an increase of 2.6%. The French automotive supplier filed 588 patent applications last year, according to the annual barometer of the European Patent Office published this Tuesday. This is the highest number of applications among French companies.
SVB’s bankruptcy on everyone’s mind
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A few weeks after the collapse of the Silicon Valley Bank (SVB), stock market indexes, and in particular the CAC 40, are experiencing a timid rise thanks to the banks and the luxury sector. Fears about the financial system seem to have eased, but it is still considered fragile. With a risk of recession looming across the Atlantic, earnings estimates are likely to be revised.
Almost a return to normal. The Paris Stock Exchange continues to rebound after recording a gain of 0.9% on Monday. At around 9:15 a.m. on Tuesday, the CAC 40 was up 0.74% at 7,130.42 points.
Contagion concerns related to the Silicon Valley Bank (SVB) bankruptcy and the Credit Suisse acquisition seem to have subsided for now. But while the market has erased its losses from Friday, it remains fragile and susceptible to negative reactions to any bad news.
This upward trend is supported in particular by the banks. BNP Paribas, Crédit Agricole and Societe Generale are experiencing increases ranging from 1.6% to 2.4%. Similarly, the luxury goods sector is seeing a rise in its stocks, with LVMH (+0.72%) and Dior (+0.63%) reaching new records.
Large industrial companies are benefiting from growth in France, which has helped reduce public debt. The public deficit fell more than expected and now stands at 4.7% of GDP. Alstom and Saint-Gobain posted an increase of more than 2%, while Valeo recorded an increase of 2.6%. The French automotive supplier filed 588 patent applications last year, according to the annual barometer of the European Patent Office published this Tuesday. This is the highest number of applications among French companies.
SVB’s bankruptcy on everyone’s mind
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