CAC40: in the red, in the wake of Wall Street

( – After dropping up to 1.4% at one hour from the end of the session, the Paris stock exchange finally managed to slightly reduce its losses: at the final gong, it lost 0.9%, at 5985 points, in particular penalized by the decline in banking stocks (-3% on BNP Paribas, -2.6% on Crédit Agricole, -2.1% on Société Générale).

In fairly limited volumes (a little less than 3 billion euros traded during the session), the index faced numerous profit takings, a logical consequence of its surge the day before (+4.2%).

In Europe, London limits the breakage, to -0.5%, while Frankfurt yields 1.2%, just behind the E-Stoxx50 (-1.1%).

Across the Atlantic, Wall Street is also in the red, with -1.1% on the Dow Jones, -1.4% on the S&P500 and -1.9% on the Nasdaq.

The session was punctuated by the publication of numerous statistics on each side of the Atlantic.

Thus, the S&P Global PMI index for the American services sector recovered in September a little more than initially estimated, since it comes out at 49.3 in final data, against 49.2 in flash estimate and 43 .7 for the previous month.

Another rather encouraging signal for the sector, the non-manufacturing ISM (Institute for Supply Management) index, published shortly after, fell by only 0.2 points from one month to the next to stand at 56.7 in September, exceeding expectations.

Another very robust figure, the ADP report of job creations in the private non-agricultural sector of the United States recorded +208,000 jobs in September (200,000 anticipated) after +185,000 creations the previous month (revised from 132,000 in initial estimate).

‘There are signs that people are returning to the labor market. Demand from employers remains robust and the supply of workers is improving, for now,” comments Nela Richardson, chief economist at ADP.

The US trade deficit narrowed to $67.4 billion in August, from $70.5 billion the previous month (which was revised from an initial estimate of $70.6 billion) , according to the Commerce Department.

The 4.3% month-on-month decline, roughly in line with market expectations, reflected a 1.1% decline in imports of goods and services to $326.3 billion, for a decline of only 0.3% in exports, to 258.9 billion.

This is not getting any better, however, for the German trade balance, which now only shows a symbolic surplus of 1.2 billion euros.

Good surprise in France: production rebounded in manufacturing industry (+2.7% after -1.6%) as in industry as a whole (+2.4% after -1.6%), according to data corrected for seasonal variations and the number of working days (CVS-CJO) from INSEE.

Having recovered from 50.4 in August to 51.2, the S&P Global composite PMI of overall activity in France signals a slight strengthening in the growth of activity in the private sector in September.

OPEC has just announced a sharp drop in production of 2 million barrels/day (and not 1 million as expected): Brent takes +1.5% to $93, the ‘WTI’ +1.5% to $87.85.

The bond markets are deteriorating significantly and on a broad front with +14Pts basis on our OATs and the Bunds (at 2.625% and 2.025% respectively) and the US T-Bonds are not better off with +17Pts at 3.782%.

As for values, Casino (-7.2%) recorded a new historic low at 8.7E.
Automotive suppliers also fell with -7.7% on Faurecia and -6.5% on Valéo.

Engie has finalized the sale of Equans to the Bouygues conglomerate, after exclusive negotiations which began in November 2021, a transaction which will reduce the energy group’s net debt by around 7.1 billion euros.

STMicroelectronics announces that it will build an integrated silicon carbide (SiC) substrate manufacturing unit in Italy to meet the growing demand for SiC components from its customers for the automotive and industrial sectors.

Goldman Sachs Bank Europe and Société Générale, acting on behalf of the French State, officially filed with the AMF on October 4 a draft simplified tender offer for EDF shares, at a unit price of 12 euros per share.

Stifel reiterates its ‘buy’ recommendation on Kering while lowering its target price from 670 to 600 euros, estimating that while Gucci remains an issue that attracts attention, the valuation seems convincing for long-term investors.

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