The Paris Stock Exchange accentuates its losses, fears of recession taking precedence over the hope aroused by discussions between Washington and Beijing for a reduction in customs duties. While private sector activity returned to growth in China, it slowed markedly in the euro area in June, “raising the risk of a contraction of the region’s economy in the third quarter “, according to the chief economist of S&P Global, which carries out the PMI surveys.
In addition, the strike called on Tuesday by oil rig employees in Norway to obtain wage increases is fueling fears of an energy shock and price tensions. Investors are also waiting for the results season to assess the resistance of companies to rising costs and constraints on supplies.
Around 2:30 p.m., the Bedroom 40 fell 2.38% to 5,811.45 points, after a floor at 5,798.36, unknown since March 7, in a business volume of 1.1 billion euros. The contracts future on American indices yield more than 1%.
Biden ready to cut tariffs
At European level, the most cyclical sectors are particularly affected, such as basic resources (-3.4%), automotive (-2.3%) and oil and gas (-1.9%). ). ArcelorMittal loose 4.5%, Michelin 4.4%, Valeo 5.6% and TotalEnergies 3%.
Joe Biden could this week announce a reduction in tariffs on some $300 billion of Chinese imports in an attempt to curb inflation, according to the wall street journal. Chinese Premier Liu He and US Treasury Secretary Janet Yellen discussed tariffs and supply chain issues by videoconference this morning. And the dialogue has been “constructive”, according to the Chinese Ministry of Commerce, which added that the two sides have agreed to better coordinate their macroeconomic policies.
Central banks on the move
Central bank action remains the main concern for investors as the Bank of Australia raised its main interest rate by 50 basis points for the second consecutive time, the highest in the institution’s history. The US Federal Reserve is due to publish the minutes of its June meeting on Wednesday, while the ECB will do the same on Thursday.
For John Velis, strategist at BNY Mellon, the market has not taken the measure of the Fed’s message. He points out that Jerome Powell beefed up his speech by insisting that his commitment to bringing inflation back to 2%, a process which will be ” most likely very painful “.
On the bond market, the yield on US government bonds is rising again after the cut on Monday for the national holiday. That of the 10-year bond tends to 2.86%, against 2.8803% at the close on Friday, while remaining below the 3% threshold. That of the German Bund of the same maturity relaxes to 1.2370% after a jump of 11 basis points on Monday. On the foreign exchange market, the greenback also acts as a safe haven, the euro yielding more than 1% to 1.0298 dollar after touching a low of almost 20 years at 1.0281.
Rémy Cointreau raised, Crédit Agricole downgraded
against the trend, Remy Cointreau gained 2.6%, supported by a rating from Jefferies, changed from “hold” to “buy”. The broker believes that the reopening of China should be favorable to the French group in the face of the potential slowdown in other markets.
Conversely, Publicis fell 5.4% as Goldman Sachs downgraded the value from “buy” to “neutral”.
Thales down 5.8% in the wake of a decline of more than 12% at Rheinmetall in Frankfurt. Deutsche Bank estimates that the results of the conglomerate specializing in armaments and automotive equipment should come out at the bottom of the range of forecasts announced for the second quarter.
Agricultural credit down 3.5% as Deutsche Bank moved from “buy” to “hold” on the stock.
JCDecaux 10.6% drop. Goldman Sachs lowered its target price on the title from 21 to 16 euros while maintaining its opinion to “sell”.
Finally, Deezer lost up to 25% compared to its introductory price for its first trading session. In an environment dominated by rising interest rates, investors are reluctant to position themselves in technology stocks.