Instability reigned without sharing markets. Friday, the operators have had new evidence. Return to image. In the morning, the hope of the publication, in early afternoon, a new figure encouraging on the American economy, the creation of jobs in may, had restored force to purchases of shares. All of the European awards were frankly with the CAC 40 well positioned to approach the 3 points. The euro was the resistance against the greenback in firming its position around 1.22 dollar. Raw materials, excellent vehicles for risky investments, were the slope in the wake of the black gold, whose quality brent was around 76 dollars per barrel. Then new lower factors appeared.
First a rumor circulating in the rooms of markets to adverse consequences: Société Générale, third French Bank, suffered losses on European markets for derivative products. Strange coincidence, these allegations, duly refuted by the Bank of the defence, fell to only four days of the opening of the trial to Jérôme Kerviel, the former trader of the company accused of fraud of EUR 4.9 billion. Rumors have caused a widespread leak of banking values.
Second coup of battering, the new Hungarian Government stated that the accounts of the country are "in a very serious situation." Assurances that the Hungarian sovereign debt did not default has not really solid minds. Financial institutions in Western Europe the most committed on the places of Central Europe have thus received a second blow. Among the most affected: Société Générale (-7,58), BNP Paribas (-5,97), Italian Intesa Sanpaolo (-6,10) and UniCredit (-5,68), the Spanish BBVA (-6,84) and Santander (-5,78) and the Austrian Raiffeisen (-8,33) and the Erste Group (-7,80).
Third and perhaps leading cause of disappointment, U.S. employment in May. Expected an increase of 536.000 units, the creation of jobs in the United States finally emerged significantly below this level, to 431.000. "This report is clearly disappointing," displays without detours Thomas Julien, Economist in charge of the United States at Natixis.
Opportunistic arbitrations
It was too much for the timid attempts to stabilize the markets. Western stock indexes were suddenly back by surrendering all more than 1.5. The Dow Jones industrial average plunged more than 3, below the 10,000 points, the lowest since February. The euro resumed its slide, spinning under $ 1.20 for the first time since March 2006. The forint has registered a lower over the past year. Oil suddenly lost more than 3 dollars per barrel. As the sovereign debts of European countries to the more fragile balance sheets, the play in three acts performed Friday has value of paradigm.
Strategists are struggling to indicate clear pathways to intervene in markets other than playing the opportunistic arbitrations conducted on very short periods. Those of us in Morgan Stanley advising small values of the rating because they are less exposed to the international situation and the strengthening of the dollar. A very defensive approach therefore. Those who have opted for emerging markets, including Asia, ponder the correction against the course of base metals because of the fear of a relaxation of China's growth these days.
Few experts, for the time being, build on a relapse into recession, but obviously markets are far-sighted to appreciate this extreme scenario. "The prospects for growth and inflation are very uncertain." "A highly inflationary scenario related to the explosion of the deficits is indeed possible, but a scenario of deflation in the Japanese is not excluded," summarizes Marie Brière, in Amundi Asset Management. Gareth Evans, strategist at Deutsche Bank, is of the same opinion. This context may not prevent that we wondered about the usefulness of equity markets. In this connection, the observation of Patrick Artus, head of economic research at Natixis, is not without merit: the instability of the stock "can make disappear the role of market shares as a means to finance the economy and as an instrument for measuring the value of the business." "It would be a market where operate as a"hedge funds"on an offer of shares retreating therefore increasingly more erratic".
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