The Paris Bourse has almost erased its decline from the day before, the reassuring quarterly performance of the heavyweights of “tech” Microsoft and Alphabet supporting the sector in Europe. Those announced by some big names in the Cac 40 are nevertheless more contrasting. Investors are also preparing for the highlight of the week: the US Federal Reserve’s monetary decision, which will be announced at 8 p.m. and will be followed half an hour later by Jerome Powell’s press conference.
Mid-session, the Bedroom 40 takes 0.39% to 6,235.84 points in a business volume of 680 million euros. The contracts future on US indices gain between 0.5% and 1.6%.
The US central bank is set to raise interest rates by 75 basis points in an attempt to tame inflation which hit 9.1% year on year in June, but the most important thing will be Jerome Powell’s message on following. The question is indeed whether the Fed Chairman will support or invalidate the lowering of Fed funds rate expectations to 3.4% at the end of the year, before a slowdown in 2023 in order to revive an exposed economy. at risk of recession.
Return to a level close to neutrality
” Fed officials were able to briefly consider more tightening after news of another price push in June, but with inflation expectations receding, and the latest indications pointing to a slowdown in activity, we expect another 75 bps rate hike (…). As this would bring the Fed funds rate target back to between 2.25% and 2.5%, a level very close to neutral, we expect the Fed to then reduce the pace of its tightening with a hike of 50 September basis points sums up Paul Ashworth, chief North American economist at Capital Economics.
The IMF’s downward revision of its growth forecast for the global economy to 3.2%, from 3.6% in April, has not escaped the notice of Fed officials, aware, like those of other central banks , that “forward guidance” is now a thing of the past, bearing in mind that uncontrolled expectations would ruin all their efforts to navigate between inflation and recession.
Towards a contraction in the euro zone?
The war in Ukraine, the specter of the ensuing energy crisis, health restrictions in China and tighter monetary policies are contributing to darken the outlook and are among the elements that prompted the IMF to warn of the risk of recession. .
Goldman Sachs analysts believe that eurozone GDP is already in a contraction phase. According to them, activity should decline by 0.1% in the third quarter and 0.2% in the fourth before a return to growth in 2023. They cite in particular the risk of energy shortages in the region, the end of the post-pandemic rebound in services, the slowdown in global momentum and the political turbulence in Italy.
LVMH and Danone swing, Michelin lowers its forecasts
Danone symbolically yields 0.8%. The food giant has revised upwards its forecast for annual sales after sales exceeded expectations in the second quarter, driven by rising prices.
LVMH grabbed a timid 0.6%. The world number one in luxury reported a 28% annual increase in sales in the first half, citing the sharp increase observed in Europe and the United States since the beginning of the year. China, however, suffered from the Covid 19 lockdowns. While growth in the key Fashion & Leather Goods division exceeded forecasts, it fell short of some investors’ expectations, RBC’s Pirai Dadhania said in a note cited by Bloomberg. LVMH has accustomed the market to exceeding forecasts by a comfortable margin.
Michelin down 4.5%. The tire maker published a lower net profit in the first half and lowered its outlook for its main markets due to the consequences of the war in Ukraine and health restrictions in China.
Worldline jumped 12.8%. The electronic payment specialist has confirmed its annual targets after seeing its results improve significantly in the first half.
Elior rises from 21%. The collective catering group confirmed its annual objectives after recording organic growth in its turnover of 20.3% to 3.42 billion euros over the first nine months of its 2022-2023 financial year.
Eurofins Scientific gives up 7.9%. The bioanalytical services group has raised its targets for 2022, encouraged by the achievement of record sales in the first half.
Atos rises 9.4%. The IT and cybersecurity group published first-half results reflecting a ” improving business momentum and confirmed its annual objectives. He also specifies that the financing of his transformation plan was “ successfully secured “.
M6 and TF1 dropped 6% and 2% respectively after announcing that the Competition Authority’s investigation services considered that the proposed merger between the two channels raised ” significant competition concerns “.