CAC40: struggling to re-cross 5900 despite the relaxation of -21 Pts OAT – 23/06/2022 at 17:07

(CercleFinance.com) – The Paris Stock Exchange continues in the same volatility register, but what appears most clearly this Thursday is the failure to take into account the spectacular easing of rates in Europe (-20 points on our OATs) and the underperformance compared to on Wall Street which is definitely opting for an uptrend with + 0.6% for the Dow Jones, + 0.9% for the S & P500 and + 1.4% for the Nasdaq.

And meanwhile, the CAC40 languishes with -0.4% (under 5,900) after logging up to + 0.7% and testing 5,957.

This session is not only volatile and paradoxical, but is also characterized by an evaporation of volumes (1.8 billion euros traded at only 45 million from the closing ‘fixing’).

The CAC40 is certainly penalized by the sharp decline in bank stocks, such as Société Générale (-5.2%), BNP Paribas and Crédit Agricole (-4%) due to the vertical decline in bond yields since 48H.

The Euro-Stoxx50 also looks gloomy (-0.5%), the DAX falls -1.3%, on the back of industrial stocks as Germany begins to experience a shortage of gas which will require a reduction in the load and a slowdown. of production.

Wall Street (+ 1% on average) is obviously not affected by the decline in growth in US private sector activity: in June the S&P Global composite PMI index slowed sharply.

It comes in at 51.2 in the flash estimate – a five-month low – after 53.6 for the month of May.

In detail, the PMI “Services” in June fell by -2 points from 53.6 to 51.6 and the “Manufacturing” fell from 57 to 52.4.

“This is the second weakest growth in activity since July 2020, with weaker growth in service sector output accompanied by the first contraction in manufacturing output in two years,” the investigators specify.

Jerome Powell predicts that the US will move closer to a recessive scenario as the Fed continues its “relentless fight” against inflation, with higher rates helping to reduce demand – is the new doctrine – against a backdrop of shortages of inflation. energy, raw materials and components.

On the same subject, Robert Habeck, German Economy Minister, gave a speech in the morning on the “guarantee of the country’s energy supply” and warned that there is a shortage of gas and that we must prepare for an economic shortage, a decline. in industrial production rates … and a further increase in gas prices in the coming months.

The statistics of the morning were no longer encouraging for Europe.

Thus, the composite flash PMI of overall activity in France fell from 57 in May to 52.8 in June, signaling the weakest expansion of French private sector activity since the beginning of the year.

Same trend in the euro zone where the S&P Global composite PMI index fell from 54.8 in May to 51.9 in June, thus highlighting a second consecutive monthly slowdown in private sector growth in the area, according to the flash estimate.

This weakening was in particular the result of a deterioration in the performance of the industry, with manufacturing production falling for the first time in two years, but the sharp deterioration in the performance of services was also confirmed.

“The impact of the thaw in demand accumulated during periods of confinement is already starting to fade, under the effect of the sharp rise in the cost of living and the decline in consumer and business confidence,” explains S&P Global.

If the PMI indices therefore remain above 50 (remember that the threshold of 50 constitutes the limit between expansion of activity – figure above 50 – and decline in activity – figure below 50) they testify to a marked slowdown in growth, both in France and in euro zone.

Furthermore, in June 2022, the economic climate in France worsened slightly, given the synthetic indicator calculated by INSEE, which lost 2 points to 104, but therefore remained above its long-term average (100). We will try to reassure ourselves with the barometer of the tertiary sector of ‘services’ which brings +2 Pt to 108.

For its part, the employment climate deteriorated again in June 2022, for the third consecutive month: its synthetic indicator lost two points to 108, remaining well above its long-term average (100).

Equity markets are obviously not benefiting from the spectacular recovery in Treasuries in Europe: for the second consecutive session, our OATs fell very sharply: -21Pt on our OATs at 1.956%, Bunds scored -22Pts at 1.4060% and Italy Only BTP -16pt at 3.4700%

Across the Atlantic, the recovery is also present with -13 points on “10 years” at 3.027, -16.5 points on “5 years” at 3.065%, -15 points on “2 years” at 2.906% and -8 points “only” ‘on the’ 30s’ at 3.165%.

On the oil side, crude oil prices remain on a downward trend, overcome by fears of an overabundance of supply with the impending economic slowdown. Barrel of Brent is now trading around $ 111, WTI is worth around $ 105.5 on NYMEX.

In corporate news, banks are at the bottom of the pack, but St Gobain is not spared with -4.3%.

Valnéva is experiencing a new feverish surge with + 25% towards 15E, Atos is bouncing from +6 to + 8% on rumors of a possible merger (OPA?) Of its partner Thales.

Air Liquide and Siemens Energy announce the creation of a joint venture, in which they will hold 25.1% and 74.9% respectively, dedicated to the mass production in Europe of renewable hydrogen electrolysers on an industrial scale.

TF1 announces that it has sold Gamned! Digital marketing agency, specialized in programmatic media buying and with over 160 employees in France and six international locations, to the HLD fund.

Finally, Arkema and Unibail-Rodamco-Westfield (URW) announce that they have entered into a nine-year lease agreement covering approximately 25,000 m2 representing 80% of the Lightwell building in La Défense, where the chemical company will establish its new headquarters at the end of 2024, with almost 1200 employees.

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