(CercleFinance.com) – The Paris Stock Exchange dramatically reduced its losses from -1.1% (around 7.130) to -0.4% (around (7.172): rates are experiencing a sharp easing in Europe after mediocre PMIs published this morning, the evolution of Wall Street turns out to be a little less negative than expected (the Dow Jones shows -0.5%) but the Nasdaq still yields -1%, the technical supports are preserved and the ‘VIX’ remains at incredibly low levels (12.90 to 13.1) given the context (a low since January 20, 2020).
The CAC40 is penalized by the decline in banking stocks (second consecutive session) then ST-Micro and Eurofins) and is at this stage down close to 2.9% over the week as a whole.
The Euro-Stoxx50 which dropped -0.7% to 4,270 lost -3% weekly (the DAX fell by -0.9% in the wake of Siemens Energy which collapsed by -36%).
In this gloomy context, investors learned this morning of various statistics in Europe.
Thus, the HCOB composite flash PMI index of overall activity in France fell from 51.2 in May to 47.3 in June, thus slipping well below the 50 mark which delimits the growth of the contraction, for the first times since January.
“Marking the end of four consecutive months of expansion, the index signals a moderate decline in activity in the French private sector, the strongest however since February 2021”, underlines S&P Global which collects these data.
In addition, the HCOB composite PMI flash index of overall activity in the euro zone fell from 52.8 in May to 50.3 in June, its lowest level since January, thus signaling a very sharp slowdown of the region’s economic growth in June.
By lining up two consecutive quarters of GDP contraction in the fourth quarter of 2022 and then in the first quarter of 2023, the euro zone has entered a technical recession.
And while a rebound is expected in the second quarter, investors are well aware that the mounting negative effects of monetary tightening should then cause growth to fall again.
The American economy is also under the threat of a recession in the face of fears that the repeated increases in interest rates decided by the Fed will penalize activity.
The US private sector saw its growth slow down significantly in June, according to S&P Global, whose composite PMI index stood at 53.0 in flash estimate for the current month, compared to 54.3 in May.
The Conference Board, a New York-based employers’ organization, warned yesterday that it forecast a recessionary episode in the United States between the third quarter of 2023 and the first quarter of 2024.
The week ended with a spectacular drop in rates in Europe with -15pts on OATs towards 2.874% and -14pts on Bunds towards 2.345%.
The US T-Bonds, on the other hand, only erased -4Pts towards 3.725%, which boosted the Dollar which rose by +0.65% towards 1.0890.
In French company news, Capgemini announces that it has signed an agreement to acquire BTC Corporation in Japan, to ‘strengthen its cloud and digital capabilities in this country in order to meet the demand for services on the entire value chain.
SES Immagotag fell -58% (around 69.8E) after 1 session of suspension following accusations of accounting irregularities by an activist fund ‘Gotham city’.
Vallourec announces the signing, on June 19, of a memorandum of understanding (MoU) with the Ministry of Investments of Saudi Arabia (MISA) for the expansion of its activities in Saudi Arabia, including the increase of its local presence and the deployment of its latest innovations in energy transition, additive manufacturing and the circular economy.
As part of the development of its public works/water sector, Samse announces that it is in advanced and exclusive discussions with Gemoise, a distributor of materials for building and public works.
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