CAC40: rises towards 7,100, little affected by decline in US indices


(CercleFinance.com) – The Paris stock market returned to equilibrium around 4:30 p.m., thanks to less pronounced declines than expected on Wall Street: the CAC now shows a slight decline of -0.1% (to 7,090) in volumes still just as limited (1.6 billion euros in 8 hours of trading).
The CAC40 is supported by Thales and Kering (+1.6%) but remains weighed down by Renault, which lost nearly 4% as new discussions have opened on a reduction in their partnership.
The European indices fell back from -0.6% (E-Stoxx50) to -1.2% (Amsterdam) while the US indices widened their losses again, with -0.7% on the S&P500 and -1.6 % on the Nasdaq: everything is happening as if only the -0.1% drop in the Dow Jones was to be deplored.

Caution also dominates as the week will be mainly driven by multiple results publications: more than 100 components of the S&P 500, including 6 of the Dow Jones index, to publish their fourth quarter accounts.

So far, the results season has been rather disappointing since of the 29% of S&P 500 companies having published their results, 69% of them have exceeded Wall Street’s expectations (compared to an average of 77% since then). 3 years).

In addition to this flurry of results, the week will be marked by the meeting of the Federal Reserve’s monetary policy committee, which will start tomorrow.

24 hours after the Fed’s statement on Wednesday, the other highlight of the week will take place on Thursday, with the monetary policy decision of the European Central Bank (ECB).

If a rate hike of 50 basis points is widely anticipated at the end of its board of governors, investors will carefully scrutinize the words of its president, Christine Lagarde.

‘All attention will be on the announcements for the sequel: what pace in March? what terminal level for the deposit rate and over what horizon?’, comments Julien Russo, portfolio manager at Swiss Life Asset Managers France.
On the figures side: Germany’s GDP fell by 0.2% in the 4th quarter of 2022 compared to the third, according to data adjusted for price, seasonal and calendar variations from Destatis because private consumption expenditure, which had supported the German economy in the first three quarters, fell short of expectations in the 4th.

The federal statistics office also indicates that over the whole of 2022, economic growth was 1.9%, which means a downward revision of the initial estimate of 0.1 percentage point. .

More encouragingly, the economic sentiment indicator (ESI) recovered further compared to the previous month in January in the European Union (+2.3 points to 98.0) as in the euro zone (+2.8 points at 99.9), according to the European Commission.

“With this third consecutive increase, the ESI is approaching its long-term average”, underlines Brussels which notes rising confidence in industry, services, retail trade and among households, but in decline in the construction.

The employment outlook indicator (IEE) also increased (+2.3 points to 108.5 in the EU and +2.7 points to 110.1 in the euro zone) and is therefore clearly above its long-term average.

The bond markets started the week down with yield increases of around +6 on our OATs or Bunds (at 2.770% and 2.3040% respectively, Italian BTPs posted +7Pts at 4.3000%… and the US T-Bonds post +3.3Pts at 3.552%

The Euro had started the day on a firm note, reaching 1.0910 against the $ (it gained 0.4% against the Swiss Franc and the Pound, +0.3% against the $) but it has just lost its advance in 2 hours against the $ at 1.0875.

In corporate news, Renault Group (-4%) announces that it has made progress in its discussions with Nissan Motor on the definition of the new bases of their partnership: agreements are being finalized for a transaction which will remain subject to approval boards of directors.

They are thus considering operational projects ‘with high value creation’, and new initiatives to strengthen their strategic agility, including a possible investment by Nissan in Ampere, a pure player in electricity and software founded by Renault.

Sanofi announces that Brussels has extended the marketing authorization (MA) of its Dupixent in the EU, making it the first and only targeted drug indicated expressly for the treatment of eosinophilic esophagitis in Europe and the United States -United.

Orpea – suspended from quotations on Monday – announces the resumption of discussions with a group of third-party French investors led by the Caisse des Dépôts et Consignations, and a group of financial creditors holding approximately 50% of its unsecured debt, of a amount of 3.8 billion euros.

Saint-Gobain announced on Monday the finalization of the acquisition of Termica San Luis, an Argentine stone wool specialist, an operation aimed at strengthening its presence in the country.

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