(CercleFinance.com) – The stock market indices have gone a little in all directions since the announcement of a 50Pts base increase in the 3 key rates of the ECB, but buyers seem to be taking control 40 Mn from the closing.
The CAC40 (+0.3%) rose above 6,200, but remained a good distance from the zenith at around 6,233 (+0.7%) before falling back towards 6,160 at the lowest of the day.
The Euro-Stoxx50 rocketed up towards 3.610 before falling towards 3.575 and then returning to equilibrium towards 3.585.
A lot of volatility also on the foreign exchange front, the Euro recovered 0.6% around 1.025 against the Dollar before returning to the red (-0.2% to 1.0170) then returning to the green with +0 .2% at 1.0200.
At the end of its monetary policy meeting, the Governing Council decided to raise the three key ECB interest rates by 50 basis points and approved – unanimously, which includes Germany – the creation of the new anti-fragmentation tool called PTI (‘transmission protection instrument’).
Christine Lagarde affirms that the ‘PTI’ will ensure in particular the good transmission of the monetary orientation in all the countries of the euro zone, as the board of governors will continue the normalization of the monetary policy’.
The council adds that this instrument ‘may be activated to combat unjustified, disorderly market dynamics which represent a serious threat to the transmission of monetary policy within the euro zone’.
The ECB recognizes that the risks of recession are still present and that inflation will remain strong, even higher than today.
It considers it relevant to consider future rate hikes, but the intensity of which will depend on the future combination of growth and inflation.
In the United States, Wall Street, expected to rise, reversed steam one hour before the opening (-0.4% for the Dow Jones and -0.1% for the S&P500): the ‘futures’ tipped to the decline with the publication of the ‘Philly Fed’ index which fell to -12.3 after -3.3 in June (the consensus was counting on stability).
The most alarming components concern the new orders component which plunged to -24.8 after -12.4 in June, the six-month business outlook at -18.6 against -6.8 the previous month and then the employment sub-index, which fell from 28.1 to 19.4.
The only consolation, the prices paid fell to 52.2 after 64.5 in June.
Not enough to be reassured with the index of American advanced indicators of the Conference Board, a barometer supposed to foreshadow the evolution of the economic situation in the United States: it fell for the fourth month in a row in June, from – 0.8% to 117.1 last month after a 0.6% decline in May (economists were forecasting a more limited decline, of 0.5% on average).
Impressive roller coaster sequence also on the bond market, the ten-year German Bund rate climbed nearly +10Pts to 1.3600% before returning to 1.265%, then falling -6Pts to 1.20% .
Ditto for the OAT which made the yo-yo between 1.84/1.96% before falling back to 1.84% then 1.78% (-6pts).
On the other hand, the yield of construction and public works jumped from 3.46% to 3.75% (i.e. more than 29Pts) before temporizing towards 3.56% (+10Pts) in a context of renewed political uncertainty in the country, with the confirmation that Mario Draghi will present his resignation to President Matarella this afternoon, opening a process of early elections.
On the European side, operators were able to take note of a further erosion of the business climate in France in July. The synthetic indicator calculated by INSEE lost one point, to 103, but nevertheless remained above its long-term average (100).
This slight deterioration in the business climate this month is mainly due to the economic downturn in services and industry, while the economic situation remains stable in retail and wholesale trade.
On the other hand, the employment climate recovered somewhat in July, after three consecutive months of deterioration: its synthetic indicator gained two points and reached 109, well above its long-term average (100).
In the news of French stocks, Seb (-11%) publishes for the first half of 2022 a net result of 72 million euros, more than halved compared to the 151 million posted at the end of June 2021, and a margin operational activity of 5.4% against 8.9% a year earlier.
Thales announces that it is raising 2022 objectives to now aim for a book-to-bill ratio significantly above one and organic revenue growth of between +3.5 and +5.5%, while confirming its margin objective of EBIT between 10.8 to 11.1%.
Publicis Groupe (+5%) indicates that it is revising its forecasts for 2022 upwards, with organic growth expected between +6 and +7%, an operating margin rate between 17.5 and 18%, and free cash flow ( FCF) of at least 1.5 billion euros.
Technip Energies has won a ‘significant’ contract (between 50 and 250 million euros) with Neste for the extension of their production capacity of renewable products in Rotterdam, the Netherlands, within the framework of their existing partnership.
Finally, Getlink, the operator of the Channel Tunnel, reveals a net profit of 52 million euros for the first half of 2022 and an EBITDA tripled (+206%) to 309 million, having benefited from the commercial commissioning of its ElecLink electrical connection.
Copyright © 2022 CercleFinance.com. All rights reserved.
Did you like this article ? Share it with your friends with the buttons below.
