(CercleFinance.com) – The Paris stock market rose by +0.7% and held up better than well, close to the highs of the day, clearly boosted by the Nasdaq which climbed by +1.5% above 12,500.
Investors seem to be trying to ‘stick to the score’ while tech has been climbing much faster than expected since mid-June: +13% taken over from the lows, it’s very impressive, many managers find themselves mechanically underinvested in the face of an increase of this magnitude.
Ditto for the S&P500 which has recovered more than 10% in 6 weeks.
But if the indices climb, this often takes place in a sidereal vacuum since the CAC40 went from 6,400 around 10 a.m. to 6,460 with less than 1 billion euros traded (the SBF-120 returns to the ’round’ score of 5,000) and the CAC approaches the last 40 minutes with less than 1.5 billion euros exchanged.
In Paris, there are no more sellers since the overflow of 6,200, the reversal of polarity in 5,800 and 6,460, against the current of all the ‘macro’ data that has literally extinguished any desire to oppose a few influential operators who ‘ make the trend.
The increase is the rule everywhere in Europe with +1% for the Euro-Stoxx50 (the absence of volumes is just as remarkable there as in Paris) but London (+0.5%) or Frankfurt (+0.5 %) lag behind.
Wall Street reopened with a bang the day after the controversial and disputed visit by China: rise of +0.80% in the Dow Jones and +1% in the S&P500, to 4,130, despite the rise in US rates of +5Pts towards 2.791%.
The ‘digits of the day’ are mixed in the United States with first of all the worst: the activity of the American private sector contracted in July for the first time since June 2020, according to the composite PMI index of S&P Global, which ultimately stands at 47.7 (revised from 47.5 in flash estimate), after 52.3 for the previous month.
Good surprise, however, with a +2% increase in orders to US industry (according to the Commerce Department, they had increased by +1.8% in May).
For their part, industrial shipments increased by 1.1% in June after growing by 2.1% the previous month.
Given the 0.4% increase in inventories, the inventory-to-delivery ratio was virtually stable at 1.46 versus 1.47 previously.
For its part, Germany returned to trade surpluses in June according to Destatis: they amounted to 6.4 billion euros, after having suffered a deficit of 0.8 billion the previous month.
The Federal Statistics Office explains that this return to positive territory is the result of a 4.5% increase in German exports, far exceeding the slight increase of 0.2% in imports, compared to the month of May.
But it’s not all good news: investors learned this morning of a decline in the S&P Global composite PMI index in the Eurozone.
Activity there slowed from 52.5 in June to 51.7 in July, reflecting a decline in private sector growth for a third consecutive month, at its weakest pace since April 2021.
The final so-called ‘composite’ index of overall activity in the region thus stood at 49.9 last month, against 52 points in June, signaling the first decline in activity since February 2021.
Manufacturers’ output recorded its biggest contraction since May 2020, while the rise in activity continued in the services sector, but at its weakest pace in six months.
“The very high level of inflation in Europe is clearly hurting demand, with service providers and manufacturers alike reporting greater customer reluctance to place orders,” said Joe Hayes, senior economist at S&P Global.
The trend is identical in the private sector of the euro zone, the index in question having also contracted sharply in July, the surge in inflation having annihilated the rebound so hoped for in consumption after the lifting of restrictions. health, show the monthly PMI surveys on Wednesday.
Among the ‘market movers’ of the day, we can also mention the very ‘hawkish’ speeches in the face of inflation by 3 members of the FED in 24 hours: after Charles Evans (FED of Chicago) and Mary Dali (FED of San Francisco) , it is up to James Bullard (FED of St Louis) to affirm that firm and resolute action must be pursued in the face of inflation in the United States.
In Europe, our OATs tend by +7pts towards 1.445%, the Bunds by +9pts towards 0.873%, the Italian BTPs stagnate towards 3.04% (reduction of the ‘spread’ to +217 with the ‘Bund’).
Finally, OPEC is disappointing by announcing an increase of only +100,000 barrels in September while Europe has a vital need to compensate for the quantities of oil it has decided to deprive itself of: the barrel appreciates by +0.8 % to $100.7.
The ball of results publications continues in Europe, with in particular announcements from BMW, Infineon and Siemens Helathineers.
In France, several heavyweights of the caliber of AXA, Société Générale or Veolia unveiled their accounts this morning.
The resurgence of geopolitical risk should also curb investor appetite, in a tense context linked to Nancy Pelosi’s visit to Taiwan.
Beijing announced last night that the People’s Liberation Army will conduct major military exercises and training activities, including live ammunition drills, in the waters and airspace of the China Sea in the coming days.
At the same time, the decline in oil prices should continue to weigh on the energy compartment, the barrel of American light crude oil (WTI) continuing its decline this morning towards 94.4 dollars.
In securities news, AXA publishes for the first six months of 2022 a net profit up 3% to 4.11 billion euros and an operating profit up 8% (+7% in organic terms) at 3.92 billion (i.e. 1.65 euros per share).
Veolia (-2%) unveils a net current income group share of 528 million euros for the first half of 2022, and an EBITDA of 2.95 billion, up 6.1% at constant scope and exchange rates compared to to the combined Veolia-Suez entity a year earlier.
Societe Generale (+3%) publishes underlying net income group share (excluding the impact of the exit from Russia, which represented a loss of 3.3 billion before tax) up 11.5% to 1.5 billion euros for the second quarter of 2022.
Finally, Saint-Gobain indicates that it has successfully launched a bond issue of 1.5 billion euros in three tranches of 500 million each, with maturities of three, six and ten years, and with coupons of respectively 1.625%, 2.125 % and 2.625%.
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