(CercleFinance.com) – The Paris Stock Exchange ends in sharp decline: it aligns a 3rd session of decline after the publication of a flurry of economic indicators which go in the direction of the continuation of a very restrictive monetary policy aimed at fight inflation ‘without weakness’.
The CAC40 index relapsed by -1.04% to 6.158, close to a technical threshold deemed crucial by chartists (6.155Pts).
Wall Street is in decline: if the Dow Jones resists, the trend is much more bearish on the S&P500 (-0.6%) and the Nasdaq (-1.1%).
This penultimate session of the week was marked by a heavy relapse in oil prices, in the order of -3.8% to -4% in London and on the NYMEX.
Difficult to establish a conclusive link with the publication of numerous statistics in the United States: the FOREX, for example, displayed an Olympian calm on Thursday.
Retail sales in the United States increased by 0.3% in August, but after a decline of 0.4% the previous month (figure revised from an initially estimated stagnation), according to the Commerce Department.
Excluding automobiles (vehicles and equipment), US retail sales nevertheless fell by 0.3% last month compared to July, where the market consensus had on the contrary anticipated a significant increase.
US industrial production fell 0.2% last month, according to the Federal Reserve, where economists had hoped for a very slight increase (confirming July’s +0.5%).
Good surprise on the other hand with the manufacturing activity ‘Empire State’ (FED of New York) which climbed by 30 points compared to the previous month to reach -1.5, not far from the threshold ‘0.00’ separating expansion and contraction of the activity.
New orders increased slightly and shipments rose strongly. Labor market indicators showed a modest increase in employment and no change in the average workweek.
The most encouraging sub-index is the price sub-index, which has fallen sharply, indicating a deceleration in future inflation.
But the ‘Empire State’ is overshadowed by the ‘Philly FED’, which is more relevant in its field: the Philadelphia Fed’s manufacturing activity index returned to negative territory in September, falling from 6.2 in August to -9.9 this month, the index’s third negative reading in the past four months.
Although most companies in the sector reported no change in activity (69%), the proportion of companies reporting declines (20%) exceeded the share reporting increases (10%).
The new orders and shipments indicators also fell: the new orders index fell 13 points to -17.6, and the shipments index fell 16 points to its lowest level since May 2020, but is remained positive at 8.8.
The Fed points out that production is 3.7% higher than its level of the previous year. The industrial capacity utilization rate fell by 0.2 points to 80%, a level that is still 0.4 points higher than its long-term average (1972-2021).
Weekly jobless claims fell unexpectedly last week in the United States: -5,000 to 213,000 in seasonally adjusted data during the week of September 10, the Labor Department announced on Thursday.
The previous week’s statistic was also revised down from 222,000 to 218,000.
Economists predicted an average increase to 226,000 registrations.
The four-week moving average, often seen as a better indicator of job market trends, fell 8,000 to 224,000 listings.
Finally, the inventories of American companies increased by +0.6% in July according to the Department of Commerce (+18.4% over 1 year, it is very singular): combined with the contraction of their sales, could constitute a slowing economic growth in the third quarter, data released Thursday by the Commerce Department showed.
Business sales have, in parallel, decreased by 0.9% in July, which does not prevent them from increasing by 12.5% on an annual basis.
At the current rate of sales, it therefore takes 1.32 months for American companies to sell their inventories, a ratio up from June (1.26).
“The path to a soft landing continues to narrow: a recession in the United States is more likely than not in the next 12 months,” warn Tiffany Wilding and Allison Boxer, economists at PIMCO.
In Asia, a slight decline in the yen was behind a modest rebound on the Tokyo Stock Exchange on Thursday (+0.2%), but the CSI 300 index of the largest Chinese companies listed in Shanghai and Shenzhen fell back by 1.3%.
In France, the final results of the consumer price index for the month of August were released by INSEE this morning. Over one year, they increased by 5.9%, after +6.1% in July, according to CVS-CJO data from INSEE, which raises its estimate for the last month by 0.1 point, compared to l provisional estimate published at the end of August.
On the bond market, the generalized monetary tightening is pushing sovereign yields up and the yield on 10-year US Treasury bonds remains at levels close to its annual highs, with +4 basis points at 3.452%.
In Europe, the small gains of the day before are erased and our OATs show a deterioration of +2.5% to 2.29%, the Bunds tighten by +2.5Pts to 1.716%, the Italian BTPs (+4Pts) recover the symbolic cap of 4% (at 4.006%).
As a result, equity market valuations are now seen as less attractive, leading many strategists, starting with those at Pictet Wealth Management, to advise underweighting global equities.
The Euro remains stable -at parity- this Thursday at 1,000/$…all the figures for the day end in a non-event on the FOREX.
On the securities side, following the government’s announcement yesterday of a cap on the increase in regulated electricity prices for 2023 at +15%, the EDF Group’s end-2023 objectives will be subject to a review once the terms of the regulation for 2023 are specified. The estimate of nuclear production in France is confirmed for 2023 at 300-330 TWh. The estimate of the impact of the drop in production on the Group’s EBITDA for 2022 has been reassessed at around -29 billion euros.
TotalEnergies announces that it has finalized the sale of its 18% stake in the onshore Sarsang oil field, in the Kurdistan region of Iraq, to ShaMaran Petroleum Corp, a company specializing in oil exploration and development in Kurdistan.
This stake was sold for a firm amount of 155 million dollars, to which may be added an additional conditional amount of 15 million dollars, depending on production and the price per barrel.
Eutelsat Communications announces that it has signed with Liquid Intelligent Technologies, a company of the pan-African group Cassava Technologies, a multi-year agreement relating to the multi-beam capacity of the Eutelsat Konnect satellite.
Liquid will leverage the resources available onboard the satellite to meet the connectivity needs of SMEs and home offices in Uganda, South Sudan and the eastern regions of the Democratic Republic of Congo.
Credit Suisse reduced its price target on Sanofi on Thursday from 110 to 106 euros, while renewing its “outperformance” opinion on the title of the French pharmaceutical group.
Berenberg on Thursday raised its target price on the Accor title, which it carries from 32 to 34 euros, while maintaining its buy recommendation on the title unchanged.
Copyright © 2022 CercleFinance.com. All rights reserved.
Did you like this article ? Share it with your friends with the buttons below.
