THE TREND
(Boursier.com) — The sharp slowdown in inflation in France in May does not allow the market to raise its head. In the red for the third session in a row, the CAC40 still drops 0.5% to 7,170 points, weighed down by rather worrying Chinese indicators. Manufacturing activity in the world’s second largest economy slowed faster than expected in May due to weaker demand. According to official data, the PMI manufacturing index thus stood at 48.8 against 49.2 the previous month, below the threshold of 50 which separates contraction and expansion of activity.
After the good news from Spain regarding the evolution of consumer prices, France also saw the pressure on prices decrease significantly in May. According to preliminary data from INSEE, consumer prices should increase by 5.1% over one year, after +5.9% the previous month. This fall in inflation would be due to the slowdown in the prices of energy, food, manufactured goods and services.
The news is also dominated by the evolution of the debates around the American debt ceiling. The agreement between Joe Biden and Kevin McCarthy must now cross the two houses of Congress, with the vote of the House of Representatives this evening. Legislation negotiated by President Biden and House Speaker Kevin McCarthy to lift the US debt ceiling, currently around $31.4 trillion, and secure further federal spending cuts, reached an important milestone last night in for presentation to the full House of Representatives for debate and vote on Wednesday.
RISING VALUES
* Leading the CAC40, Capgemini climbed 4.7% to almost 160 euros. In addition to winning two contracts in Catalonia, the digital services company is boosted by the announcement of a major extension of its long-standing strategic partnership in data analysis and artificial intelligence (AI) with Google Cloud. The two parties will create a global Google Cloud Generative AI Center of Excellence (CoE) to help businesses realize the full potential of AI technologies. The new CoE will help customers achieve their business transformation goals, deepen engagement with their customers, and accelerate value creation from AI investments.
* Veolia (+2.8% to 28 euros) is supported by a note from Morgan Stanley which upgraded the file from 32 to 34 euros while reiterating its ‘overweight’ opinion.
* Sanofi (+1.5% to 95.7 euros) unveiled positive phase II data relating to frexalimab, a new experimental anti-CD40L antibody, showing a significant reduction in disease activity in patients with relapsing MS- remitting. Frexalimab met its primary endpoint with an 89% reduction in new gadolinium-enhancing T1 brain lesions after 12 weeks of treatment in the highest dose group compared to placebo. Sanofi plans to launch pivotal trials in the treatment of multiple sclerosis in early 2024.
* Dassault Systems gained 1.5% to 41.4 euros. Goldman Sachs raised its target from 46 to 50 euros (‘buy’).
* JCDecaux (+2% to 18.6 euros) announced yesterday evening the acquisition of the activities in Italy and Spain of Clear Channel Outdoor Holdings. These operations are carried out independently and respond to different market opportunities. The amount of the acquisition (before taking into account cash/net debt positions) of Clear Channel Italy is 15.1 million euros and that of Clear Channel Spain is 60.0 million euros, i.e. 6 .7 times the EBITDA of the last 12 months at the end of March 2023 combined for the two countries, before taking into account synergies.
FALLING VALUES
* TotalEnergies lost another 1.3% to 53 euros in the wake of crude prices (72.7 dollars for Brent). The oil giant has also teamed up with Tree Energy Solutions (TES) to study and develop an industrial-scale production unit in the United States for e-gas (or “e-NG”), a synthetic natural gas produced from renewable hydrogen and CO2. With a production capacity of 100,000 to 200,000 tonnes per year, this project will be owned equally by the two partners and operated by TotalEnergies. This partnership combines the know-how of TES in e-NG and the expertise of TotalEnergies in the production of renewable electricity, the management of large projects and the liquefaction of gas.
* The automotive group Stellantis (-1.3%), in collaboration with TotalEnergies and Mercedes-Benz, yesterday inaugurated its Automotive Cells Company (ACC) Lithium-Ion battery plant at the Billy-Berclau/Douvrin site in France. This is the first of three planned gigafactories in Europe.
* Poor Chinese economic indicators are once again influencing the luxury sector: Kering fell by nearly 3% below 500 euros. LVMH And Hermes lose a little more than 1%.