The Paris Bourse ends sharply down 1.33% to 4,911.24 points

The Paris Bourse closed sharply lower Thursday (-1.33%), shaken by the outlook of the US Federal Reserve which painted a more uncertain picture than expected of the US economy.

The CAC 40 index lost 65.99 points to 4,911.24 points. The day before, it had increased by 0.79%. The trading volume was once again low, at 2.3 billion euros.

Investors have retained “the fears” on the evolution of the economic recovery in the United States, the publication of the minutes of the Fed, affirms to AFP Guillaume Chaloin, head of management actions at Meeschaert AM.

The minutes of the last meeting of the monetary policy committee recalled “the uncertainty surrounding the economic outlook” in the United States. The trajectory of the economy “depends heavily on that of the virus and the response of the public sector to it”, that is to say the adoption of a new aid plan, said the Fed.

However, the White House and the elected Democrats in Congress have been discussing for several weeks new aid measures for businesses and households, as well as for local communities and schools, without reaching an agreement.

The minutes were also used “as a pretext to take profits” according to Mr. Chaloin, while the markets have seen almost no correction sessions this summer, “especially in the United States”, where both the Nasdaq and the S&P 500 broke records earlier this week.

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Finally, the Fed has also sent a message of caution about its future monetary policy. On the contrary, “investors were hoping that the Fed would put some money back on the table, as the Chinese central bank did,” notes Mr. Chaloin.

In the afternoon, the number of new job seekers in the United States was mixed.

Another indicator showing an economic slowdown, manufacturing activity in the Philadelphia region (northeastern United States) continued to grow in August, but at a slower pace than in June and July.

In addition, in Europe, the pandemic confirms its strong resurgence in several countries: Germany has returned to the levels of new contaminations at the end of April, a period then still considered the peak of the pandemic, while France recorded on Wednesday its worst advance since May.

Cyclical stocks, the most subject to economic conditions, suffered the most from the Fed’s publication.

Renault lost 4.86% to 23.20 euros, and Peugeot 3.08% to 14.66 euros.

Banks were also lagging behind, with a decline of 2.62% to 13.55 euros for Société Générale, 2.71% to 8.46 euros for Crédit Agricole and 2.39% to 35.96 euros for BNP Paribas.

In contrast, Accor advanced 2.25% to 23.68 euros. According to Le Figaro, the hotel group has studied a merger project with its British competitor Intercontinental Hotels Group, without however going further in the discussion. Asked by AFP, the two groups made no comment.

Unibail-Rodamco-Westfield has rebounded a little after several sessions of strong declines, allowing it to gain 2.86% to 39.59 euros.

Euronext CAC40

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