CAC40: penalized by the deterioration of the bond markets


(CercleFinance.com) – The CAC40 ends the session with an increase of only 0.43% towards 8045Pts after having gained 1.4%. The Euro-Stoxx50 also saw its surge go from +1.5% (beyond 5,030Pts) to +0.4% (towards 4,975) in 1 hour.

Wall Street, which immediately erased half of Friday’s losses (Dow Jones and S&P500 at +0.8/+0.9%, Nasdaq at more than 0.9%) has just lost 90% of its lead and the Nasdaq even falls back into the red.

The stock markets had regained a semblance of serenity this morning – because the time seems to have come to resort to diplomacy, according to Joe Biden’s wishes – but the rise in rates is causing trouble.

The surprise of the day is in fact the deterioration of the bond markets: the US ’10-year’ is in fact soaring by almost +14 points towards 4.632%, our OATs are stretching by +8.5 points towards 2.9450% and the Bunds of +8Pts towards 2.435%, Italian BTPs of +9Pts towards 3.83%.

Also note the continued rise of the Dollar which gains +0.1% against the Euro, which stands at a low of 1.0640, a level not seen since 2/11/2023).

The (geopolitical) tension therefore falls clearly with a VIX at -5.5% around 16.30, ‘Brent’ oil consolidates from $91 towards $89.4 (-0.8%) and gold below 2,340 $ after a brief ‘peak’ at $2,430 on Friday (and a close around $2,375).

Investors therefore seem to be focusing on the results ‘season’ which begins to be in full swing from this week: some 44 companies belonging to the S&P 500 index, including six Dow Jones stocks, will publish their accounts this week.

Investors will be able to assess the ‘fundamentals’ of the economy through the accounts of listed companies… and optimism is there this Monday.

However, FactSet data now only predicts an increase of 0.9% in the profits of American groups in the first quarter, compared to a further +3.4% at the end of March.

While JPMorgan’s performance disappointed last Friday, Goldman Sachs’ accounts – expected at midday – reassured: ‘GS’ is little exposed to provisions for default risk on its outstanding – almost zero – corporate credit or to individuals).

The results from Bank of America and Morgan Stanley expected tomorrow will be particularly followed by the markets.

The announcements from Johnson & Johnson, Netflix and Procter & Gamble will also be closely monitored in the coming days.

In Europe, the week will be mainly animated on Wednesday by the results of ASML, one of the locomotives of the recent rise in European markets, then of Nokia.

According to analysts, favorable publications – and not just confined to the technology sector – would promote a stock market recovery by reinforcing optimism regarding stocks.

In terms of economic indicators, U.S. retail sales increased 0.7% sequentially in March, better than market expectations, following a 0.9% increase the previous month (revised). from an initial estimate which was +0.6%).

The Department of Commerce, which publishes these figures, specifies that excluding the automobile sector (vehicles and equipment), American retail sales increased by 1.1% last month, after an increase of 0.6% in FEBRUARY.

Manufacturing activity continued to contract in the New York region in April, remaining in negative territory for the fourth month in a row.

The ‘Empire State’ index – compiled by the regional branch of the Federal Reserve – stood at -14.3 this month, compared with -20.9 in March.

It is the sub-index of weekly hours worked which deteriorated most notably, to -10.6 against -10.4 last month, followed by that of deliveries (-14.4 against -6.9 last month). previous month) and the six-month horizon expectations sub-index deteriorated from 21.6 to 16.7.

In Europe, seasonally adjusted industrial production rose by 0.8% in the euro zone and by 0.7% in the EU in February from the previous month, according to Eurostat estimates, after falls of respectively 3% and 2.7% in January.

Investors’ eyes will also turn to Beijing, where Chinese gross domestic product (GDP) figures will be published tomorrow, providing valuable clues about the recovery of the world’s second-largest economy.

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