Paris Stock Exchange: The mini-salvation board is Chinese


In this kind of bear market, investors are looking for the slightest positive signal that could reverse the trend. It’s a technique that works 100%, or rather always ends up working: there is a moment when you hit rock bottom. The advantage of stock markets is that the next bottom is always higher than the previous one, if you allow the necessary time to slip away. This is why despite chronic bouts of stock market panic, the long-term index charts look like a nice bullish slope.

Yesterday, red was still everywhere and attempts to rebound were aborted in the United States. The session was moderately volatile with a Nasdaq intraday curve that surely has an official name in technical analysis. But since I’m totally uneducated in the matter, I’ll let you imagine cat ears, because that’s what it looks like. This means that the session closed at the bottom of the ear, and down in the case that interests us. The US technology index lost 0.44% and the broad S&P500 index some 0.6%. It’s a sign of a lull from previous sessions, but investors didn’t get the technical bounce they were hoping for in the aftermath of a 5% plunge.

The big technology stocks have continued to correct, which obviously does not help the affairs of the indices in the United States. About half of the decline recorded this year by the S&P500 is attributable to 8 stocks and the other half to the other 492. This is the calculation made by the Wall Street Journal between 1er January and May 17. It shows that Microsoft, Apple, Amazon, Alphabet, Meta Platforms, Tesla, Nvidia and Netflix “cost” the index 6.82%, when all the others contributed 6.92% to liabilities. Over the period in question, the S&P500 lost around 13.8% (this figure has increased over the last two sessions).

I still have some good news this morning: the markets have a positive signal that has enabled Western leading indicators to recover and Asian markets to end the week in the green. China cut its benchmark rate for five-year mortgages overnight, to support a weakened real estate sector. And then you say to yourself “it’s hard to see how it’s going to solve the world’s inflationary ills, these financiers are a little cracked“. Of course it doesn’t look like that. Besides, it may be the case. But in their great quest for branches to catch up with, investors are ready to seize the slightest twig in this Seriously, there’s a lot of stuff piled high on the shelf of current global finance risk factors, including inflation, recession risk, or shortages. There’s also China’s weak economic momentum, made up of a cocktail of real estate crisis, punitive policies towards digital and zero-covid policy. Thus any measure in favor of recovery, even partial such as this timid action on 5-year rates, is welcomed positively. malicious could argue that it is a small measure that shows that the Chinese central bank still does not want to draw a major support plan, but we are satisfied with little at the moment on the stock markets.

So balance sheet, the Japanese Nikkei 225 gained 1.2% this morning, the Australian ASX 200 1.1%, the Hong Kong Hang Seng 2% and the Shanghai CSI300 1.4% at a time when I write these lines. Western leading indicators are taking advantage of this to anchor themselves in the green at the dawn of this clearing day since we are on the 3rdand Friday of the month, day on which index derivatives mature.

The backdrop remains unchanged: companies are beginning to disappoint with their results, inflationary pressure is everywhere and the American central bank is stepping up its outings to make the market understand that it has gone from whatever it takes to boost the economy at whatever cost to bring prices down. In such a context, it is probably important to have fragments of good news to hold on to. The CAC40 gained 0.4% to 6300 points shortly after opening.

Economic highlights of the day

There won’t be any major indicators today other than German producer prices and UK retail sales from 8am. The whole macro diary here.

The euro rises around 1.0571 USD. The ounce of gold is trading at 1841 USD, clearly accelerating on yesterday’s session. Oil is sticking to its guns, with North Sea Brent at USD 111.19 a barrel and US light crude WTI at USD 108.77. The yield on US 10-year debt fell to 2.84%. Bitcoin is trading around $30,100.

The main changes in recommendations

  • Adux: GreenSome Finance remains on the buy side with a price target raised from 3.27 to 3.51 EUR.
  • Akzo Nobel: Berenberg remains long with a price target reduced from 112 to 110 EUR.
  • Atlas Copco: Berenberg remains to be held with an adjusted price target of 600 to 110 SEK, after the share split.
  • Claranova: Kepler Cheuvreux starts monitoring the purchase by targeting EUR 6.
  • CRH: Jefferies remains long with a target raised from 53.10 to 54.80 EUR.
  • Hikma: Jefferies remains long with a reduced target price of 2950 to 2290 GBp.
  • Iberdrola: Jefferies remains long with a price target raised from 11.50 to 12 EUR.
  • Lagardère: AlphaValue goes from reducing to buying, targeting EUR 32.30.
  • Lonza: RBC goes from sector performance to outperformance by targeting CHF 650.
  • NatWest: Investec moves from hold to buy targeting 245 GBp.
  • NFON: Berenberg remains long with a target price reduced from 23 to 20 EUR.
  • Rockwool: Societe Generale goes from selling to keeping, aiming for 2000 DKK.
  • Royal Mail: Berenberg remains long with a target price reduced from 650 to 575 GBp.
  • Sika: Berenberg remains on the buy side with a price target raised from 325 to 370 CHF.
  • STMicroelectronics: AlphaValue remains long with a price target raised from 60.60 to 67.60 EUR.
  • Talanx: Deutsche Bank takes over the follow-up to keep, aiming for 45 EUR.
  • Telia: UBS goes from neutral to long.

In France

Important (and less important) announcements

  • Sébastien Proto could succeed Frédéric Oudéa at the head of Société Générale, confirming internal continuity.
  • The CHMP of the EMA recommends the marketing of Xenpozyme from Sanofi.
  • Richemont proposes the former boss of Hermès to its board of directors.
  • Frenchman Laroze will be Vivendi’s next CFO.
  • The British CMA is studying the impact on competition of the takeover of Equans (Engie) by Bouygues.
  • Air France-KLM is discussing with Apollo an injection of €500 million into the capital of a spare engine subsidiary.
  • Electricité de France estimates the budget for the British nuclear power station at Hinkley Point C at £25-26 billion.
  • Gaztransport & Technigaz selected for a new LNG carrier in Korea.
  • Bic wants to reduce its scope 3 GHG emissions by 5% by 2030.
  • Tikehau Ace Capital enters the capital of the Bt2i Group alongside the historical shareholders.
  • A Deputy Managing Director for Vergnet.
  • McPhy beefs up its management team.
  • Transition Evergreen obtains the Greenfin label.
  • Capelli signs a land acquisition in Howald City, in the city of Luxembourg.
  • Biosynex takes 75% of the English company BHR Pharmaceuticals.
  • Broadpeak launches its IPO on Euronext Growth.
  • Energisme has published its accounts.

In the world

Business results

Important announcements (and others)

Readings



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