Risk aversion is back on the Paris Stock Exchange in this first session of the week, which will be dominated by inflation and the first results of American companies for the second quarter. The threat of new containment measures in China after the appearance in Shanghai of a new sub-variant of Omicron, BA 5.2.1, is weighing on luxury stocks. LVMH and Kering yield around 2%.
At the same time, the major cyclical stocks are affected by the fear of a total cut in gas supplies. The Nord Stream 1 gas pipeline, through which most Russian gas passes to Europe, was closed on Monday for maintenance operations which should last a week. ArcelorMittal 2.9% drop, Saint Gobain by 2% and Alstom by 1.1%
Mid-morning, the Bedroom 40 lost 1.10% to 5,966.60 points in a business volume of 430 million euros.
The Fed will get tougher
Stronger-than-expected U.S. jobs data for June certainly reflects the resilience of the U.S. economy, but it also bolsters expectations of a 75 basis point Fed rate hike at the end of the year. of the month. According to the evolution of the contracts future on Fed funds, this probability is fully priced in by the market, while that of a more substantial tightening is assessed at 7%. As a result, the yield on the 10-year US bond rose back above 3% and is trading at 3.0533% in Europe this morning, as are the 2- and 5-year maturities.
Investors will particularly follow, on Wednesday, the evolution of consumer prices in the United States in June, which should have accelerated to 8.8% over one year, a new peak of 40 years, after 8.6% in May . Expected on Friday, the inflation expectations component of the University of Michigan’s consumer confidence survey, closely watched by the Fed, will also be scrutinized.
Banks in the red
A more aggressive Fed, combined with fears of recession, particularly in Europe, are supporting the US currency, which continues to strengthen against the single currency. The latter is struggling to stay around 1.0140 dollars after hitting a 20-year low of 1.0072 on Friday, a stone’s throw from parity.
Fears of economic deterioration are also weighing on banks as Danish institution Danske Bank has revised down its full-year profit forecast due to the rapid rise in interest rates. and difficult financial market conditions. In Paris, BNP Paribas, Agricultural credit and Societe Generale yield between 2% and 3%.
The second-quarter earnings season kicks off on Thursday with the accounts of major U.S. banks like JPMorgan, Morgan Stanley, Citigroup and Wells Fargo. Overall earnings per share for S&P 500 companies are expected to rise 5.7% year on year in the three months to the end of June, according to data compiled by I/B/S Refinitiv, while estimates for the third and fourth quarters were revised slightly downwards.
EDF supported by a note from JPMorgan
STMicroelectronics is stable. The Franco-Italian chipmaker and GlobalFoundries have announced the creation of a new semiconductor factory in France. The two groups declare that it is an investment of several billion euros which will benefit from the support of the State, without specifying the exact amount.
same for me Sanofi. The pharmaceutical group has reported positive data from a phase III study on fitusiran prophylaxis in adults and adolescents with severe hemophilia A or B. The group also announced that a pivotal Phase III study of efanesoctocog prophylaxis has met its primary endpoint in patients with severe haemophilia A.
EDF gains 1.1%. JPMorgan raised its recommendation on the electrician from “underweight” to “overweight”. The broker also raised its price target from 7.60 to 12 euros, believing that the nationalization desired by the French government will be done via a purchase offer rather than by the vote of a text of law in Parliament “ This means that minority shareholders can expect a premium to speed up the process », Indicates the author of the note.
Airbus takes 0.6%. The aircraft manufacturer announced that it delivered 295 aircraft over the first six months of the year and won 259 net orders over the period.