(BFM Bourse) – The Parisian index approached this first session of the week on a cautious note. The CAC 40 closed down a symbolic 0.07%, with unattractive PMI indices in the euro zone. Investors are creeping ahead of a very busy week.
The Paris Bourse is starting this high-risk week timidly. Already down 0.2% at lunchtime, the CAC 40 finally contained its decline to 0.07% at 7427.31 points on Monday evening, thanks to a slightly higher opening of the American indices on Wall Street. The Parisian index even managed a brief foray into the green at the end of the session, before changing its mind a few minutes later.
Caution drove this first session of the week as the indicators turned out to be mixed. In the United States, activity in the American private sector continued to grow in July, but at a slower pace than in the previous month. The PMI S&P Global composite index, which combines services and industry, thus stood at 52 in July against 53.2 in June.
In the euro zone, this same indicator came out disappointing. The composite index stood at 48.9 in July against 49.9 in June and 49.7 expected by economists polled by Reuters. An index below 50 marks a contraction in activity.
“Achilles’ heel of the euro zone, the manufacturing sector contracted again in July, the decline in production also accelerating during the month. Activity, on the other hand, continued to increase in the services sector, but at a rate much less pronounced than at the start of the year”, underlines Cyrus de la Rubia, economist of the Hamburg Commercial Bank, which co-produces these data.
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A high risk week
Investors have also already turned their minds to the major events of the week, namely the monetary policy meetings of the US Federal Reserve (Fed), the European Central Bank, the Bank of Japan.
“We expect Chairman Powell to maintain a hawkish bias (in favor of a rate hike) as the committee [de politique monétaire] still considers the next rate move to be more likely up than down. Given a tight labor market and above-target inflation, the monetary policy stance will remain hawkish to avoid an aggressive assessment of rate cuts and an unintended easing of financial conditions,” said Xiao Cui, Senior Economist, Pictet Wealth Management.
The highly concentrated results season will also be scrutinized with great attention, with 80% of CAC 40 residents revealing accounts and/or turnover. The publications will also be very numerous in the United States, with in particular Microsoft, Alphabet or even Boeing and Meta.
“Investors are waiting to be able to justify the incredible rebound observed in the financial markets, with the results and the outlook for companies. So far, the markets have progressed against the backdrop of lower results for companies, thanks in particular to the hope linked to AI and the prospect of seeing central bank rates lower in the near future, “said Vincent Boy, market analyst at IG France.
Elis in the small papers of Bank of America
On stocks, Elis (+3.9%) took advantage of a rating from Bank of America which included the stock in its ‘SMID Cap Europe Best Ideas’ list, i.e. its list of preferred stocks in the universe of European small and mid-caps.
Plastic Omnium, for its part, ended up 2.9% thanks to half-year results that exceeded expectations, particularly in terms of the operating margin and also drew in its wake the other automotive suppliers Valeo (+ 1.4%) and Forvia (+ 1.3%).
Orpea rose 1.8% as the courts validated the retirement home operator’s safeguard plan.
Icade lost 1.6% after unveiling its half-year results and its restated outlook for its health division, currently being sold. The group also reviewed its office property assets in order to transform or sell those that have become obsolete.
As for small and mid-caps, the half-year sales of Aures (-8.4%) were strongly sanctioned, as were the prospects presented by the manufacturer of terminals for points of sale.
On other markets, the euro lost 0.6% against the dollar at 1.1073 dollars. Oil contracts are moving up. The North Sea Brent contract for delivery in September advanced 1.9% to 82.42 dollars a barrel, while that of the same term on WTI listed in New York also rose 2.4% to 78.91 dollars a barrel.
Sabrina Sadgui – ©2023 BFM Bourse