(CercleFinance.com) – the Paris Stock Exchange (-0.1% to 7,392 after a weekly gain of almost 3.5% on Friday) had started the 3rd quarter (and second half) on a strong note (test of the absolute record closing at 22.370 on 22/05 on the CAC40 ‘GR’) before losing its meager residual gains following a slightly disappointing reopening on Wall Street: the Dow Jones fell by -0.2%, the S&P500 by 0, 1%.
Volumes are expected to be reduced and trading very calm in New York on the eve of the July 4 celebration, which will see trading close at 1:00 p.m. (7 p.m. Paris time).
Over the past week, the Dow Jones and the S&P 500 both gained 2%, as did the Nasdaq-100, which has just completed nine weeks of growth out of ten for a cumulative gain of nearly +20% and a performance of +39% which is quite simply the best in the history of this index.
With a gain of around 15% over the first half of the year, the S&P posted its fifth best first half since 1990 this year (after 1989 and 1999 for example), which is usually a good omen for the whole stock market year.
US investors will be able to refine, in the coming days, their judgment on the state of the American economy according to several statistics which could constitute the next catalyst to go higher, or on the contrary justify a consolidation.
In Europe, the final PMIs for the manufacturing sector led the start of the session today, knowing that their preliminary estimates had disappointed, showing numbers at the bottom since the start of the pandemic.
The HCOB PMI buyers’ index for French manufacturing, produced by S&P Global, recovered marginally from 45.7 in May to stand at 46.0 in June.
For the record, it is the threshold of 50 which separates the expansion and contraction of a sector’s activity for the PMI indices: the lower the index is below this threshold, the faster the rate of contraction.
The HCOB PMI for manufacturing in the eurozone fell from 44.8 in May to 43.4 in June.
Among the other macroeconomic indicators on the program for the week are the ISM services index in the United States, the latest ‘minutes’ from the Federal Reserve and the US employment report.
All of this data will allow market participants to build scenarios on the timing of interest rate hikes expected from the Federal Reserve, while recent statements by Jerome Powell, its chairman, have reinforced the hypothesis of at least two further rate hikes.
On the bond market, the yield on 10-year US government bonds fell -4Pts to 3.78%, the German Bund and the OAT of the same maturity, the real benchmark rate in the euro zone, erased -2Pts symbolic at 2.374% and 2.915% respectively.
The situation continues to deteriorate for the British ‘Gilts’ with +4.5 Pts to 4.442%.
On the currency side, the dollar continued its recovery against all the other major currencies and the euro lost a few fractions, around 1.0890 dollars.
Both benchmark crude contracts are losing around 0.2%, extending their flat consolidation of recent sessions.
A barrel of Brent is trading at 75.2 dollars, while that of American light crude (West Texas Intermediate, WTI) is trading at 70.4 dollars.
The CAC40 remains supported by Total Energies with +2%, the Casino title which plunged -15% this morning (new low recorded at 3.22E) limits the damage with -4.5% now.
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