(CercleFinance.com) – The Paris Stock Exchange ends this last session of the week (and the stock market semester) almost at equilibrium (-0.06%), at 5,882 points, finally erasing the gains accumulated at the beginning of the day. -noon, while the Parisian index arrogated more than 1.4%.
After having opened higher, the other European markets also saw their momentum reverse at the end of the day: Frankfurt will thus have to settle for +0.7% (after having gained up to +1.5% during the day), the E-Stoxx50 by 0.3% (after +1.6%), while London lost 0.5% after a tumble on the 4 p.m. The FTSE100 nevertheless gained 1.2% on the 1 p.m.
The European markets seem to have been weighed down by the declaration of a member of the FED who confirmed that the scenario of a rise of +75Pts at the end of July was the most probable.
In this context, Wall Street evolves without real direction, with a Dow Jones in equilibrium, an S&P500 which grabs +0.1% and the Nasdaq which assumes nearly 1%.
In this session of the ‘4 witches’ which closes the second quarter and especially the first half of the stock market – which turns out to be the worst for 70 years – the Paris Stock Exchange was the scene of more than 7.7 billion euros in trade.
Over the week, it nevertheless shows a loss of nearly 5%. The drop reached 8% over the month and more than 17% since the start of the year.
A single figure on the menu on June 17: the index of American leading indicators of the ‘Conf’Board’ fell again in May, notably under the influence of the fall in the stock markets.
This barometer lost 0.4% in May, after having already fallen by 0.4% in April (in accordance with economists’ forecasts).
Beyond the correction on Wall Street, the indicator was penalized by the slowdown in the residential construction sector and the deterioration in consumer prospects, explains Ataman Ozyildirim, head of economic research at the Conference Board.
“The index is still trading at levels close to its all-time highs, but it suggests that an economic slowdown is likely in the short term, knowing that the tightening of monetary policy is expected to further curb growth”, adds- he.
Faced with the proliferation of monetary tightening measures (60 central banks have raised their rates since January 1), which threaten to bring the world economies into recession, investors are struggling to regain a taste for risk.
Market participants are beginning to realize that the acceleration of the monetary tightening cycle could have an impact on growth, first in the United States, then in the rest of the world.
While no asset class has been spared by the recent correction in the financial markets, the main warning signals undeniably come from the bond market.
The noticeable easing that is taking place this Friday on the Treasuries market should however offer a semblance of calm to equities, even if concerns are far from being completely allayed.
Yields on US Treasuries are all falling again, with the ten-year returning to around 3.215% (against 3.305% Thursday evening) after hitting 3.45% yesterday.
The two-year and the five-year are also falling back from their peaks the day before, confirming that the time has now come to relax on the bond compartment.
In Europe, our OATs eased by -0.4Pts towards 2.263%, the Bunds fell by 1.6805% towards 1.73… which made it possible to reduce the spread with Italian BTPs which eased by – 11pts at 3.74%.
The macroeconomic agenda was also mine in Europe today, with the publication of the final inflation figures in the euro zone, then the industrial production and the production figures in the United States.
Inflation in the euro zone stood at 8.1% over one year in May, according to figures published Friday by Eurostat, which confirms its first estimate made at the end of last month.
Industrial production rose slightly in the United States in May. It rose 0.2% last month after rising 1.4% in April, according to figures released Friday by the Federal Reserve. Economists on average were forecasting a 0.5% gain in May.
The session should also be marked by the expiration of many types of ‘futures’ and options contracts, a conjunction known as the ‘four witches’ which usually promotes trading volatility.
On the side of values, Oddo raises its advice on the title Air France-KLM, from ‘underperformance’ to ‘neutral’, while lowering its price target to 1.45 euros, against 4.4 euros previously. ‘ We are raising our estimates, especially for the 2022 financial year (+11% at the level of EBITDA and +9% vs consensus, EPS down following the capital increase), in order to integrate an improvement in yields at Q2 and Q3’, says the analyst.
Invest Securities confirms its neutral opinion on the Dassault Systèmes stock. ‘While we believe that most of the derating is behind us, our updated objective at 32E (against 36E) does not offer any potential to go back to buying’.
Bouygues Telecom announces that it is starting the second phase of its 5G deployment strategy by signing a strategic partnership with Ericsson for the supply and integration of a new core network called 5G Stand Alone (SA) which will meet the future needs of its consumer and business customers.
Finally, Navya indicates that it has signed a three-party cooperation agreement with Michelin aimed at accelerating the development and testing of pneumatic and non-pneumatic solutions developed by Bibendum by integrating them into autonomous shuttles designed by Navya and deployed in real conditions in a rural environment with the beti operator.
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