The tensions on the banking system continue to haunt financial markets.

24 mars 2023

The Paris stock market is expected to open slightly lower after posting a fourth consecutive session of gains on Thursday. Fears about the solidity of the banking system continue to plague markets despite attempts by political and monetary leaders to calm the situation.

Doubts about the strength of the banking sector do not seem to have dissipated, thereby dampening appetite for risky assets globally. This sentiment, which affects all financial markets, is reflected in the attraction for government bonds, whose yields have significantly relaxed over the past two weeks.

In New York, the S&P 500 rebounded by 0.3% last night, while the Nasdaq Composite rose by 1%. But this should not hide the decline of 1.7% in the KBW index of US banks, now at its lowest level since October 2020. The yield of government bonds reflects this climate, as well as the sentiment that central banks are approaching the end of the monetary tightening cycle. The yield on the 2-year US Treasury note experienced a significant decline for the 11th consecutive session on Thursday, with a more than significant drop of 125 basis points over the period, and was very volatile this morning.

Yellen and Lagarde at the helm.

The bankruptcy of Silicon Valley Bank and the acquisition of Credit Suisse by UBS have made investors cautious about credit institutions. And regulators, no more than political and monetary leaders, have yet succeeded in restoring confidence. Treasury Secretary Janet Yellen told lawmakers on Thursday night that she was ready to act to convince people that bank deposits are safe, after dismissing any strengthening of deposit guarantees beyond the current threshold of $250,000.

In Europe, Christine Lagarde is expected to try to reassure political leaders about the strength of the banking system on Friday at a meeting of heads of state and government of the European Union, according to Reuters. The market will also be interested in the evolution of private sector activity in Europe and the United States, and in particular the possible impact of the banking turmoil on business morale.

Virbac confirms its targets.

Virbac has confirmed its targets for 2023, having achieved its profitability forecast in 2022. For this year, the veterinary laboratory still anticipates a ratio of "current operating income before amortization of assets from acquisitions" to revenue between 13% and 14% at constant exchange rates.

Casino. Moody's has downgraded the distributor's rating from "B3" to "Caa1", with a negative outlook. This downgrade takes into account "the continued decline in the group's market share in the retail sector in France, the maintenance of negative free cash flow in France, and a reduction in the margins of French distribution activities in 2022," the rating agency said. Among analyst notes, JPMorgan downgraded Technip Energies from "overweight" to "neutral".