(CercleFinance.com) – The Paris Stock Exchange ended this first session of June in the red, at 6,418 points (-0.77%), close to its lowest for the day (6,416 points). We observe the same downward trend in Frankfurt (-0.34%), London (-0.88%) and on the E-Stoxx50 (-0.72%).
This day also corresponds to the 1st day of reduction of the FED’s ‘balance sheet’ (sales of assets) which amounts to nearly $9,000 billion. It was thus marked by several stock market reversals with Wall Street switching from green to red in the space of an hour (the S&P500 going from +0.7% to -0.7%) which showered the European markets .
The US indices are now all down, around -0.9% for the S&P500, the Dow Jones and the Nasdaq.
Wall Street fell sharply after the publication of the ISM measuring the growth of manufacturing activity in the United States: it accelerated in May, to 56.1 last month, against 55.4 in April, while economists on average expected a figure of 54.2.
The index thus remains well above the 50 threshold, testifying to growth in the manufacturing sector, for the 24th consecutive month.
The new orders sub-index came out at 55.1 from 53.6 the previous month, while that of employment fell to 49.6 from 50.9 in April.
The acceleration of the manufacturing industry belies the scenario according to which the economic recovery is running out of steam in the United States while the Fed has now started a cycle of monetary tightening.
Published a little earlier, the sector’s PMI purchasing managers’ index calculated by S&P Global stood at 57 in final data for the past month, against a ‘flash’ estimate which was 57.5, and after a level of 59.2 in April.
This causes a further deterioration in the bond markets with +7Pts on the US T-Bonds at 2.915% which contaminates our OATs (+4Pts at 1.685%) and the Bunds (+5Pts at 1.1730%) which establish a new ‘worst level of the year’).
Fixed income market specialists reacted little this morning to the figures for the growth of the manufacturing sector in the euro zone in May: according to the firm S&P Global, the PMI index of the manufacturing industry slowed to 54.6 the month last, compared to 55.5 in April.
This is an 18-month low.
The decline in new orders is mainly due to strong supply pressures and inflationary pressures.
The risks of a contraction in the euro zone economy have increased in recent weeks, with analysts fearing that the coming monetary tightening by the ECB could eventually lead to a recession.
However, the job market remains in top form with an unemployment rate anchored at a low of 6.8%.
In France, the S&P Global PMI of the manufacturing industry for France fell from 55.7 in April to 54.6 in May, thus posting its weakest level since October 2021.
The index was mainly dragged down by the new orders sub-index, which showed a marked weakening in demand, as French manufacturers reported a further increase in their business volumes.
New car sales in France fell by -10% in May, when it is generally a very ‘robust’ month: a negative ‘base effect’ may have played out compared to a record May 2021.
Bruno Lemaire indicates that the growth estimate will be reviewed by Bercy by the end of June/beginning of July.
In China, the Caixin barometer of the ‘PMI’ remains anchored in contraction territory at 48.8, down from April: the gradual lifting of containment measures in Shanghai (and soon Beijing?) should favor a recovery above the 50 threshold.
Big correction on the other hand on oil (-4.6%) with a barrel of ‘Brent’ fell back below $117.3 (against $124 the day before) while OPEC could validate the principle of a more significant increase in its production… but the rumor of Russia’s exclusion from the brainstorming sessions was unfounded.
In the news of French companies, TotalEnergies (-2.6%) announces that at the end of the subscription period, 49,189 subscribers in 101 countries, representing 42.3% of eligible employees and former employees, have subscribed to the capital increase reserved for them, for an amount of 337.8 million euros.
Sanofi announces that the United States FDA has granted Breakthrough Therapy Designation to efanesoctocog alpha (BIVV001) for the treatment of hemophilia A, a rare and life-threatening bleeding disorder.
Finally, the Novacyt share is sought Wednesday morning on the Paris Stock Exchange after the Franco-British company announced the approval by the British Health Security Agency (CTDA) of its PROmate Covid-19 1Gene test.
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