(CercleFinance.com) – The Paris Stock Exchange ended the day with a decline of 0.26%, to 6362 points, thus signing a 3rd consecutive session of decline after the publication of several disappointing economic statistics concerning activity in Europe but also in the USA.
In Europe, the E-Stoxx50 and Frankfurt lost nearly 0.3%, ahead of London (-0.7%).
The reopening of Wall Street, without real direction, does not encourage taking risks: the Dow Jones yields 0.3%, the Nasdaq grabs 0.3% and the S&P returns to equilibrium.
To make matters worse, the rise in oil is accelerating since Brent and WTI climb respectively by nearly 2.5% (to $99.2 in London).
Worse, the price of a megawatt/hour of oil equivalent has reached and exceeded $1,000 on the ‘future’ in Rotterdam (in fact, there are no longer any transactions at this level, 10 times higher than the average price in August 2021).
US natural gas prices also hit their highest level in 14 years.
This morning, investors were able to take note of the composite flash PMI index of overall activity in France, calculated by S&P Global. This fell from 51.7 in July to 49.8 in August, signaling the first decline in overall activity since February 2021.
Manufacturing production fell by almost -2Pts for a third consecutive month, even posting its strongest rate of contraction since the initial wave of Covid-19 in the first half of 2020, a drop attributed to the reduction in the overall volume of new orders.
At the same time, S&P Global indicates that the growth of activity continues in the French services sector, the rate of expansion however showing only a moderate level, the weakest since April 2021.
In the euro zone, private sector activity contracted again in August, as the sharp rise in the cost of living depressed demand in the services sector.
The preliminary results of the surveys carried out by S&P Global among purchasing managers (PMI) for the current month thus confirm the scenario of a possible return to recession for the economy of the monetary union.
The composite index – which measures activity in both the manufacturing and services sectors – thus fell to 49.2 this month, against 49.9 in July, settling in territory of contraction for the second consecutive month. This is an 18-month low.
For analysts at Oddo BHF, everything today contributes to aggravating the pessimism of European companies.
‘The prices of electricity and natural gas are going from record to record, weighing on corporate margins and household budgets despite certain temporary capping measures’, explain the economists of the private bank.
‘Without hope of a rapid normalization of the energy markets, the European economy is heading towards recession’, predicts Oddo.
Nicolas Warren, the president of ADENE even predicts an industrial collapse this fall, as many companies are no longer profitable, they will prefer to suspend their activity.
In this context, the euro, which had already broken through the parity threshold against the dollar yesterday, set a new 20-year low this morning, below $0.9920.
Yields on OATs and BUNDS, however, rose by +3 basis points respectively, while that on US T-Bonds remained unchanged at around 3.03%.
British Gilts are soaring (+9Pts to 2.61%) while inflation could exceed 18.5% by the end of 2022 (Citigroup study).
In economic terms, the flash PMI index for ‘services’, which fell from 47.3 to 44.1 (against an expected rebound to 49) then the manufacturing PMI, which fell from 52.2 to 51.3, came out below estimates.
Sales of new homes (-12.5%, from 585,000 to 511,000) show an intensification of the crisis currently being experienced by the American real estate market.
In securities news, TotalEnergies and its partner SSE Renewables announce the start of electricity production at the Seagreen offshore wind farm, located 27 km off the coast of Angus in Scotland, a park in which the French group owns a 51% stake.
Vinci announced on Tuesday that London Gatwick airport – of which it holds 50.01% of the capital – had returned to profits in the first half under the effect of the marked recovery in air traffic. Britain’s second-largest airport posted an after-tax profit of £50.6 million, compared with a shortfall of more than £377 million in the same period of 2021.
Pharnext, a biopharmaceutical company developing new therapies for neurodegenerative diseases, fell on the stock market on Tuesday following the announcement of a loan agreement concluded with Neovacs for an amount of 2.5 million euros.
Finally, Chargeurs announces the completion of the cash-financed acquisition of The Cambridge Satchel Company, a benchmark British brand in the market for high-quality leather goods at affordable prices, its fifteenth acquisition since 2015.
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