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CAC40: rebounds above 5930, strong general rate easing


(CercleFinance.com) – The CAC40 erased 75% of its initial losses: it rose from -2.2% to -0.5%… and it has one hour left to end in the green and thus validate a technical signal positive.

On Wall Street, the Dow Jones and the S&P500 rose from -1% to +0.4% to +0.5% after the Fed Chairman’s speech this afternoon (at 3:30 p.m.).

Jerome Powell’s speech and his unsurprising arguments (before the Senate Banking Committee) are reassuring.

He did not confirm the ‘all-in’ against inflation (to use the formula of Christophe Waller of the FED of Saint Louis) and affirms that the restrictive monetary policy will not lead to a risk of recession (anticipated by 45 % of economists in the United States).

Following last week’s 75 basis point rate hike, the first in 30 years, a further 75 basis point hike in the fed funds rate is being considered after the scheduled meeting of July 28… but the FED will then ‘adapt to the data it will have’, and this could translate into a drop in inflationary pressures: the hope of a soft landing is reborn.

Even before J.Powell took the floor, we observed a strong easing of rates (-15 basis points on average),
European bond markets fell sharply with -16.5pts on our OATs at 2.16%, -15pts on Bunds at 1.615%, -17.5pts on Italian BTPs at 3.61%.
Across the Atlantic, the T-Bonds also posted -16 basis points at 3.145% while the barrel of oil fell -5% to $109.

On the side of values, Faurecia (-8%) announced the success of its capital increase of 705 million euros aimed at refinancing in part the acquisition of the German Hella.

This capital increase with preferential subscription rights will result in the issue of nearly 45.5 million new shares with a nominal value of seven euros each, on the basis of a unit subscription price of 15.5 euros.
Carrefour fell -7% towards 17E with the fear of a price war between distributors.

Crédit Agricole presented its Ambitions 2025 plan. This plan is based on strong organic growth potential with a target of more than one million additional customers. The group is aiming for net income Group share of more than 6 billion euros and wishes to further strengthen profitability with a return on tangible equity of more than 12%.

Amundi also today unveiled its 2025 strategic plan, focused on pursuing organic growth, maintaining an industry-leading cost/income ratio and high shareholder returns. Amundi will generate average annual growth in adjusted net income of 5% over the period.

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