(CercleFinance.com) – 35 minutes from the close, Paris has widened its losses a little since the opening of Wall Street (US indices in dispersed order, the decline slightly predominates) with -0.8% (around 7190) at the occasion of this 4th retreat session.
The CAC resists however better than in the morning (-1.5% to 7,145 Pts), around 7,190 points, notably penalized by the decline of Total Energies from the banks.
Since the start of the week, the decline in the Parisian index has thus approached 3%, the same for the Euro-Stoxx50 with -0.8% at 4,285 Pts).
The news on the financial planet remains marked by the latest statements from Jerome Powell, the chairman of the Fed, who clearly implied that the central bank was not done with rate hikes in view of the persistence of the ‘inflation.
Consequently, the specter of an imminent entry into recession for the American economy is increasingly materializing and dissuading investors from any inclination to take risk.
Yesterday, at the final bell, the Dow Jones also fell by 0.3% while the Nasdaq Composite sank about 1.2%.
“We have seen a rotational movement away from ‘FANMAG’ (Facebook, Apple, Netflix, Microsoft, Amazon and Google) and towards sectors labeled ‘value’ such as energy and industrials”, comments a trader .
On the statistical front, sales of existing homes increased to 4.30 million units in May at an annualized rate (consensus of 4.25 million after 4.29 million in April).
The index of leading indicators in the United States fell a little less than expected in May, the Conference Board employers’ organization said on Thursday.
The index fell 0.7% to 106.7 last month as economists on average forecast a decline of 0.6%. It had already fallen by 0.6% in April, a figure which has been confirmed.
“The index of leading indicators has fallen at the end of each of the last 14 months,” said Justyna Zabinska-La Monica, economist at the Conference Board, in a press release.
In view of the tightening of interest rates and the persistence of inflation, the ConfBoard now says to forecast a recession in the United States which would spread out from the third quarter of 2023 to the first quarter of 2024. United States remained stable during the week of June 12, at 264,000, according to the Labor Department (the previous week’s figure was indeed revised up from 262,000 to 264,000).
In addition, the four-week moving average – considered a better indicator of the underlying trend in the job market – shows an increase in the number of registrations of 8,500 compared to the previous week, to 255,750, i.e. the highest figure recorded since November 2021 (260,000).
Finally, the number of people regularly receiving benefits fell by 13,000 to 1,759,000 during the week of June 5, the last week available for this statistic.
On the European side, the business climate in France remained stable in June, given the synthetic indicator calculated by INSEE (based on the responses of business leaders in the main market activity sectors), which remains at 100 , its long-term average, the indicator focused on industry, is recovering from 99 towards 101.
In the United Kingdom, the Bank of England’s (BoE) monetary policy statement published at lunchtime confirmed expectations: the BoE added +50pts to 5%, the day after poor inflation figures ( 8.7% against 8.4% expected, ‘core’ inflation up 0.3% to 7.1%) for the month of May which left no hope for anything else.
And as the problems fly in squadron, the British public debt has just exceeded 100% of the GDP, which motivates the very clear deterioration of the conditions of refinancing with ‘Gilts’ at 10 years which show more than 4.45% of yield (against 4.402% the day before).
Note this radical change of strategy in Turkey: the central bank raises the key rate from 8.5% to 15%, in an almost ‘Volckerian’ movement.
The repercussions of Powell’s declarations (who considers inflation still too high in the US) remain limited in scope on the bond compartment (T-Bond at 3.77% against 3.722%), and the oscillations of +5/-5Pts in Europe, in ‘what one day does, the next defeat’ mode: the Bunds thus fall from 2.43% to 2.48%… and go nowhere.
Ditto for our OATs which contracted from 2.958% to 3.011% or Italian BTPs (from 4.052 to 4.103%).
The Dollar continued to decline this morning, below 1.1010/E and is now stabilizing towards 1.0980.
In the news of French companies, Thales indicates that it has been chosen by SkyDrive, a manufacturer of eVTOL aircraft based in Japan, to supply it with its FlytRise flight control system for its future series zero-emission three-seater eVTOL aircraft.
Engie indicates that it has invested, through its venture capital fund Engie New Ventures, in TreaTech, a Swiss start-up specializing in the production of biogas. The energy group explains that it has completed a round of funding of nine million euros for TreaTech.
Finally, in order to strengthen its liquidity, Casino announces the launch of the sale of its residual stake in Assaí, ie 57,582,850 shares representing 11.7% of the capital of this Brazilian ‘cash & carry’ distribution brand.
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