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CAC40: a devastating month of September on equities and rates


(CercleFinance.com) – The month of September is on track to end at a low point, with a decline of -8.5%, while the 3rd quarter ended with a drop of -5.6%.
The Paris Stock Exchange fell back to its annual lows tested on Wednesday morning, the CAC40 falling -2.1% to 5.648, a new annual low, in the wake of Wall Street which is backtracking and erasing all its gains from the previous day. (-2% for the Dow Jones and -2.5% for the S&P500), without forgetting the Nasdaq which fell by -3.2% and sank below 10,700, heavily penalized by the tension in US interest rates.

Markets deepened their losses after taking notice of a fresh salvo of indicators: the most anticipated was Germany’s preliminary price index for September, and it came out above expectations, sparking renewed rate tension.
The consumer price index in Germany, calculated according to European HICP standards, rose 2.2% compared to August and 10.9% year on year (Reuters consensus of 1.3% and 10.0% /year): the Bunds deteriorated by +9pts to 2.23% and our OATs by +8pts to 2.84%.

Figures also across the Atlantic: unsurprisingly, economic activity in the United States contracted by 0.6% in the second quarter at an annualized rate, according to the 3rd and latest estimate from the Commerce Department, American companies having clearly reduced their investment spending in the face of the threat of a recession.
The so-called ‘PCE’ basic price index, closely watched by the Federal Reserve, was nevertheless revised upwards, to +7.3% on an annual basis, after an initial estimate of +7.1%.
Excluding the volatile elements of energy and food, the PCE in the ‘core’ version stands at +4.7%, compared with +4.4% in its previous estimate
Analysts fear a further surge in consumer prices towards 10% over the current month after the end of the discount on pump prices and train fares.

All these figures came out above the consensus, adding additional uncertainty and causing a sharp rise in sovereign bond yields in the United States: T-Bonds rose by +8pts to 3.7850%.

The worst performance of the day went to the British ‘Gilts’ which posted +18 Pts to 4.1850%, despite the support given by the BoE to issues with maturities of 10 to 50 years.
The Euro remains above 0.9700 against the Dollar and even adds +0.3% to 0.9760 against 0.954 the day before.

As for values, another -21% collapse of Orpéa (around 10.55E) after degraded results and doubts about the maintenance of refinancing conditions if margins deteriorate too much.
Accor has raised its EBITDA target for the 2022 financial year, now expected between 610 and 640 million euros. For the record, it has so far aimed for an annual result of more than 550 million euros.

The hotel group says it expects its owner services business, which includes sales, marketing, distribution and loyalty, to return to breakeven gross operating surplus (EBITDA) in the second half of the year. 2022.

The United States Food and Drug Administration (FDA) has approved Sanofi’s Dupixent® (dupilumab) for the treatment of nodular prurigo in adults. Dupixent becomes the first and only drug specifically indicated for the treatment of nodular prurigo in the United States.

Renault Group will hold a Capital Market Day on Tuesday November 8, 2022. On this occasion, Luca de Meo, CEO of Renault Group and Thierry Piéton, CFO of Renault Group, will present an update of the group’s strategy and average financial objectives. term of the Renaulution plan.

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