Paris (AFP)

The Paris Stock Exchange fell sharply (-2.23%) Thursday at midday, accusing the blow faced with the complicated economic outlook for 2020 outlined by the US Federal Reserve.

At 1:01 p.m. (11:01 a.m. GMT), the CAC 40 index fell 112.74 points, dropping below 5,000 points to 4,940.74 points. The day before, he had lost 0.82%.

The Parisian rating is in sharp decline since the opening.

Wall Street was preparing to open also in clear decline. The futures contract for the flagship Dow Jones Industrial Average fell 1.99%, that of the broader S&P 500 index by 1.65% and that of the highly technological Nasdaq by 1.29%.

"The markets are correcting sharply after comments deemed disappointing by Jerome Powell, the president of the Fed," noted Franklin Pichard, chief executive officer of Kiplink Finance.

Its economic projections note "the fact that this crisis will leave its mark at least until 2022" and these forecasts "cautious are added to those already published (and also very cautious) by international institutions in recent days" as the OECD or the World Bank at the beginning of the week and which "contributed to reducing excess optimism on the financial markets", he added.

The US economy is slowly starting to recover and should bounce back next year, but the road will be long, warned the American central bank on Wednesday evening, which promised to leave rates at zero for a long time in the face of uncertainties that remain large.

The Fed forecasts a drop in US GDP of 6.5% in 2020, before a strong rebound of 5% in 2021 and more modest growth (3.5%) the following year.

"Investors will have to get used to the idea that the global economy has not even entered a recovery phase, knowing that the epidemic is still present on a global scale and that economic forecasts are still very volatile, "observed Tangi Le Liboux, a strategist for broker Aurel BGC.

The health horizon remains far from clear with now more than two million people infected in the United States and a political situation still under very high tension, with the massive wave of demonstrations against police violence after the death of George Floyd.

In terms of indicators, the first quarter of 2020 saw the destruction of 497,400 jobs in the private sector in France, a drop of 2.5%.

Weekly claims for unemployment benefits in the United States should once again grab the attention of investors looking for any signs of a potential recovery after the start of deconfinement.

- Automobile at half mast -

The stocks most penalized were logically those who benefited the most from the strong ascent last week.

Unibail-Rodamco-Westfield plunged 6.39% to 58.94 euros, and Europcar 9% to 2.08 euros.

The banks were struggling too. Societe Generale lost 4.14% to 15.13 euros, Crédit Agricole 2.91% to 8.33 euros and BNP Paribas 2.89% to 36.27 euros.

The automobile is not better off. Renault fell 6.76% to 23.17 euros and Peugeot 6.09% to 13.49 euros.

Soitec sank 3.25% to 92.40 euros. The manufacturer of semiconductor material, which has been growing strongly for several years, now forecasts stable turnover in 2020-2021 due to the coronavirus crisis.

© 2020 AFP