2024 - CAC40: falls to 7500 pts, penalized by the luxury sector

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(CercleFinance.com) – After having conceded 0.93% yesterday, the Paris Stock Exchange today dropped 0.98%, to 7500 pts, heavily penalized by the luxury sector with in particular -4.2% for LVMH, -3.8% for Hermès and -2.2% for Kering.

On the other hand, across the Atlantic, buyers seem to be launching into cheap buybacks: the S&P, Dow Jones and Nasdaq are up between 0.2% and 0.4%.

Let us recall that Wall Street experienced one of its worst sessions of the year on Tuesday, in the wake of an ISM manufacturing index deemed worrying for growth in the United States.

Note, 48 hours after the publication of the ‘NFP’, that of the ‘JOLTS’ report: ‘open’ job offers in the United States fell by -3.3% to 7.67 million in July, compared to 7.91 million in June, the lowest level since January 2021, and far from the consensus of 8.09 million.

Since the peak in March 2022, job openings have decreased by -4.51 million, or -38%.

The ISM manufacturing index came in at 47.2 yesterday, slightly below expectations of 47.5, partly due to the continued decline in new orders which does not bode well for the future.
Today, it is the US trade deficit for July which has jumped by +8% to -78.8 billion dollars.

This will fuel concerns about the US economy, which have suddenly taken precedence over the prospect of future monetary easing by the Fed.

The news seems more reassuring in Europe if we rely on several activity statistics (Eurozone and France): the HCOB ‘composite’ PMI index of overall activity in the Eurozone signals a re-acceleration of private sector growth in August (from 50.2 to 51), the pace of expansion remaining however very moderate, while the manufacturing PMI deteriorates once again.

In France, the composite HCOB PMI index gained four points in August to 53.1, reaching a 27-month high and signaling, for the first time since last April, growth in overall activity in the French private sector.

This is entirely linked to the increase of +5 points (to 55) in the PMI of ‘services’ in August, in connection with the boost from the Olympic Games.

The markets will also be closely monitoring the US employment figures, which will be published at the end of the week and which will provide a more precise idea of the health of the American economy.

“Next Friday’s report will be even more important in determining the future trajectory of the markets,” warns Florian Ielpo at Lombard Odier.

The wave of risk aversion affecting stocks has resulted in a recovery in the bond market after ten days of deterioration.
As a result, the yield on ten-year US Treasuries fell by -4.7 points to 3.795%.

In Europe, that of German Bunds – the reference for borrowing rates in the region, erases -6.2 points and returns to 2.212%.

Weighed down by the ISM manufacturing index, oil prices are plummeting to return to levels not seen since December 2023.
Brent drops 1% below $73 a barrel, WTI falls below $70 on the NYMEX, its lowest since mid-December 2023.

Finally, on the FOREX, the $ lost all its gains since August 29 with the ‘$-Index’ at -0.5% towards 101.33 and the Euro gaining +0.3% at 1.1080$.

In the news of French companies, Veolia announces the end of its national analysis campaign to establish an inventory of the presence of the 20 regulated PFAS in drinking water in France, based on the quality thresholds in force.

Crédit Agricole announced on Wednesday that its insurance subsidiary had successfully placed a €750 million bond issue.

Finally, Lhyfe announced the signing of a five-year contract for the sale of hydrogen produced from renewable energy sources, with the service station developer H2 Mobility Deutschland, for some of its service stations in Germany.

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