The Paris Stock Exchange begins August with a limited gain, the solid results of the HSBC bank and the departure of a first shipment of Ukrainian cereals from the port of Odessa helping to cushion the deterioration in manufacturing activity in the euro area. The PMI index established by S&P Global fell to 49.8 points in final data for July, against 52.1 in June, thus signing its first passage below the threshold of 50 points, synonymous with a contraction in activity, since June 2020.
This deterioration, which reflects the increase in the risks of recession, is however accompanied by an easing of the tensions on the supply chains and ” a sharp easing of inflationary pressures in the manufacturing sector but not in the energy sector, says Chris Williamson, chief economist at S&P Global. He also notes that gas shortages will further hamper activity levels, the contraction of which is likely to accelerate.
Mid-session, the Bedroom 40 gained 0.40% to 6,474.04 points in a business volume of 620 million euros. Elsewhere in Europe, the Dax of the Frankfurt Stock Exchange takes 0.35% and the FTSE Eb Milanese 1.33%. The contracts future on American indices yield between 0.1% and 0.2%.
The Fed not so “dovish” as it seems
Global financial markets posted their best monthly performance since 2020 in July, thanks to generally favorable corporate publications and the feeling that the US Federal Reserve could reduce the extent of its next monetary tightening.
This interpretation of the future evolution of the US central bank’s monetary policy is considered optimistic to say the least by economists, especially since Neel Kashkari, the president of the Minneapolis Fed, reaffirmed on Sunday that the main objective of the Federal Reserve is to bring inflation back towards 2%, while his colleague from the Atlanta Fed, Raphael Bostic, declared shortly before that much remains to be done in terms of monetary tightening.
BNY Mellon also recommends against betting on a more “dovish” shift by the Fed in terms of interest rates. ” We believe that the press conference [de Jerome Powell] actually contained some elements ‘hawkish’, including the 78 different allusions to inflation in the 26-page transcript. It seems clear to us that the Fed is nowhere near concluding that inflation is back under control, and that further hikes will be needed, even at the cost of a mild recession and/or a weakening of the labor market writes John Velis, US Forex and Macro Strategist at BNY Mellon.
On the bond market, the yield on the US 10-year bond tightened by 3 basis points to 2.67%, while that of the Italian BTP of the same maturity stabilized around 3.01% after falling below the 3% threshold for the first time since May.
Air France-KLM and the banks in sight
The week which begins will be animated by the monetary decisions of the Bank of Australia and the Bank of England, by the OPEC meeting, which should decide on the evolution of its production for the month of September, as well as by the July employment report in the United States.
Company publications will also continue with around 170 S&P 500 companies, including Capterpillar, AMD, Starbucks and Uber, not to mention Europeans BP, Merck, BMW, Infineon, Bayer, Beiersdorf, Lufthansa and Asians Alibaba and Nintendo. In France, five components of the Cac 40 will reveal their quarterly results, namely: Bouygues, Axa, Société Générale, Veolia Environnement and Crédit Agricole.
Air France-KLM rose 5.1%, boosted by a rating from HSBC, which went from “hold” to “buy” on the title of the air carrier.
BNP Paribas rises by 1.5%, Agricultural credit by 0.4% and Societe Generale 1% after the better than expected quarterly results of the Sino-British HSBC, which has benefited from the rise in interest rates and has pledged to bring its dividend back to the level before the health crisis as soon as possible. The bank has also raised its profitability forecasts by counting on growth in its income. In London, HSBC advances by 5.8%.
Bollore earn 3%. The group published sharply higher results for the first half, supported in particular by the good performance of its transport and logistics activities. Its 29.5% subsidiary Vivendi takes for its part 1.3%.
The automotive sector continues to rebound, still driven by the good quarterly performance of Renault and Stellantis, despite the announcement of a 7.1% drop in new car registrations in France last month. Renault garners 4.7%, Stellantis 2.7% and Faurecia 3.3%.
vinci yields 0.5%. Grupo Aeroportuario del Centro Norte (OMA), announced that it had received a letter from the investment fund Fintech Advisory regarding the indirect sale of 29.9% of the capital of the Mexican airport group to a subsidiary of Vinci Airports for a total amount of 815, 4 million dollars (797.3 million euros).