(CercleFinance.com) – The Paris Stock Exchange (-0.4%) continues its sideways drift within a 6,600/6,660 corridor.
Note that at 6,660, the CAC40 has only lost 7% since January 1 (and nothing since November 30, 2021)… which means that the major upheavals of 2022 have little more impact than a standard consolidation in a notoriously overbought market, as everyone admitted in early January.
The brief bearish episode of the night on the ‘futures’ (the CAC40 lost -1%) following the fall of a ‘Russian-made missile’ in Poland causing two victims was quickly circumscribed.
The incident hyped up by Zelensky and all his propaganda outlets in the Western media and on social networks – which obviously pointed to Russia – hoping for an escalation and the spread of the Russian-Ukrainian conflict via the involvement of NATO was quickly debunked.
And at the highest level since the Russian fire hypothesis was denied by Joe Biden and Jens Stoltenberg (NATO Secretary General): ‘The explosion in Poland ‘probably caused by a Ukrainian air defense missile’.
But it is quite logical that despite the general relief, the markets are taking a breather after the gains of the past few weeks, which have seen the CAC recover 17% since October 13.
Equity markets were buoyed by optimism that inflation would slow, which could lead to a pause in the Fed’s rate hike cycle.
Today, investors’ attention turned first to the retail sales figures in the United States: they are rather robust with an increase of +1.3% (including excluding autos, the consensus was rather counting on +0.6%).
Import prices for their part fell by -0.2% against a backdrop of falling oil product prices and the strength of the dollar, which limits the effects of imported inflation.
The Department of Labor had published a decline of 1.1% in September, 1.2% in August and 1.4% in July.
Finally, US industrial production fell 0.1% last month, according to the Federal Reserve, roughly in line with economists’ expectations…but the September figure was revised from +0.4% to +0 .1%.
The Fed points out that production is 3.3% higher than its level of the previous year. The industrial capacity utilization rate fell by 0.2 points to 79.9%, a level that is still 0.3 points higher than its long-term average (1972-2021).
In Europe, operators were able to take note of a further acceleration in inflation in Great Britain to +11.1% in October (after +10.1% in September), with inflation reaching its highest rate since October 1981, according to the Office for National Statistics (ONS).
The bond markets seem to be confirming an imminent economic slowdown and are experiencing a rather unexpected upturn: -19Pts of yield on our OATs at 2.477%, -16Pts on Bunds at 1.996% and -29Pts on Italian BTPs at 3.905%, i.e. less than 200Pts of ‘spread’ compared to the Bund, against +240Pts 1 month ago.
US T Bonds also eased -13.5 Pts to 3.7300%.
In company news, Alstom publishes for its first half of 2022-23 adjusted net income up 4% to 179 million euros and adjusted operating income up 18% to 397 million, i.e. an improved margin of 0.4 points to 4.9%.
Renault Group announces the launch of Renaulution Shareplan, a large-scale employee shareholding operation, as part of its ambition to triple the number of its employee shareholders to reach 10% by 2030.
Air France-KLM announces the launch of an offering of subordinated last ranking bonds with an indefinite duration, convertible into new shares and/or exchangeable into existing shares for a nominal amount of approximately 300 million euros.
Finally, Deezer announces the signing of a partnership agreement with the Italian DAZN, an international streaming and sports entertainment platform, to allow DAZN subscribers to listen to their favorite tracks, albums and playlists on Deezer.
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