THE TREND
(Boursier.com) – The Paris stock exchange resumed its upward path at the end of the morning (+0.3% around 7,340 points) but without much conviction after a prank below 7,300 points at the start of the session.
Early estimates of European inflation yesterday showed a bigger-than-expected decline in core inflation in August, despite a rebound in headline inflation, reassuring investors that price momentum is slowing two weeks before the next ECB meeting (September 14).
Like the CAC40, US futures change shortly before the publication of employment figures. Data that should confirm the slowdown in the labor market of the world’s largest economy and thus, no doubt, allow the Fed to take a break next month. The market anticipates 170,000 job creations in August and a stable unemployment rate of 3.5%. The average hourly wage is expected to rise by 0.3% over one month and 4.3% over one year.
The US PCE indicator of price dynamics, one of the Federal Reserve’s favorite inflation indicators, showed yesterday that inflation continued to decline across the Atlantic. A good thing for the Central Bank even if the employment data of the day will be decisive for its next decision of monetary policy. The probability of a Fed rate status quo in September is now 89%, according to CME Group’s Fedwatch Barometer.
RISING VALUES
* Air France-KLM gained 1.3% to 14.2 euros. The airline confirmed yesterday the completion of the consolidation of all of its outstanding shares and the concomitant recognition of the capital reduction by reduction of the nominal value of each share. The completion of these transactions resulted in the exchange of 10 Air France-KLM shares for 1 new share with a nominal value of 1 euro (taking into account the concomitant capital reduction bringing the nominal value of each new share from 10 euros to 1 euro, i.e. a reduction of 9 euros per share allocated to the “issue premium” account). The share capital is now divided into 257,053,613 shares.
* Leading the CAC40, TotalEnergies gained 2% to 59.2 euros. Morgan Stanley adjusted the target from 64 to 66 euros (‘overweight’).
* Pernod Ricard timidly resumed 0.2% to 181.6 euros on Friday, after its correction of more than 6% yesterday, in the wake of its annual point and cautious forecasts for the first quarter of the 2023-2024 financial year… Among brokers’ opinions, Jefferies remains positive on Pernod Ricard with a price target that goes from 235 to 230 euros, Stifel adjusts its target from 210 to 202 euros (‘hold’) and Deutsche Bank reduces its target from 162 to 159 euros (‘sell’).
FALLING VALUES
* Renault stumbles almost 5% to 35.6 euros, weighed down by an analysis note. UBS has indeed degraded the title of the manufacturer to ‘sell’ by cutting its target from 42 to 31 euros. The bank explains that Renault’s financial performance could remain solid in the coming quarters, perhaps even with positive surprises, but most indicators are no longer improving. The ‘incumbent’ manufacturers are the most threatened by growing Chinese competition and by Tesla, adds the broker. Ampere’s IPO also doesn’t seem likely to unlock significant value.
* Crossroads lost 2% to 17.3 euros. 75 of the largest manufacturers have undertaken to reopen price negotiations with distributors in France in September, with the aim of achieving a price reduction “from January 2024”, declared Bruno Le Maire on France 2. “The 75 largest manufacturers will now engage in price negotiations with distributors, from September until October 15, with the aim of having a price reduction from January 2024 “, explained the Minister of Economy.