Sluggish this morning, the Paris Stock Exchange is now rising. While the fears caused by Nancy Pelosi’s visit to Taiwan seem to be fading, many challenges remain, including the risk that central banks’ response to inflation will affect the global economy. Several Fed officials have also been more “hawkish” than expected on the subject of soaring prices.
Corporate publications are generally good despite some disappointments, but activity contracted in the Eurozone in July as consumer spending curtailed in the face of rising prices. The market will watch, this afternoon, the ISM index of activity in services in the United States, a sector which represents more than two-thirds of jobs.
Around 2:30 p.m., the Bedroom 40 takes 0.64% to 6,450.68 points in a business volume of 1 billion euros. The contracts futures on US indices gained around 0.5%. PayPal rose nearly 14% in pre-market after raising its annual forecast and announcing that Elliott Management held a $ 2 billion stake in “fintech”. Advanced Micro Devices (AMD) on the contrary yields 5% in reaction to a revenue estimate for the third quarter lower than Wall Street expectations.
The Fed “far from having finished with inflation”
St. Louis Fed Chairman James Bullard said he was determined to raise interest rates to bring inflation back toward the 2% target. ” We’ll be firm and make it happen “, he declared this Wednesday on CNBC.
The day before, Mary Daly, head of the San Francisco branch, had warned that the Federal Reserve is “far from being finished with the fight against inflation, while his colleague from Cleveland, Loretta Mester, waits for proof ” truly convincing » that the rise in prices is heading towards moderation on a monthly basis. Same story with Charles Evans (Chicago), for whom a 50 basis point hike in September would be appropriate if inflation shows signs of improvement, while suggesting that, if not, a 75 basis point tightening percentage could also be ” OK “.
The comments come as the market had hoped for moderation from the Federal Reserve after Jerome Powell hinted last week that it might be appropriate, when the time comes, to scale back the magnitude of upcoming rate hikes. ” The Fed’s communication is ambiguous, and it is far too early for [les banques centrales] backtrack commented Emmanuel Cau, head of European equity strategy at Barclays.
Pelosi continues her Asian tour
The Speaker of the US House of Representatives has sparked China’s ire by traveling to Taiwan to meet with the island’s top leaders. Beijing responded by announcing military drills including missile launches until Aug. 7 and urging airlines to avoid areas around Taiwan.
China has also announced the cessation of exports of natural sand to Taiwan, a key component in the manufacture of semiconductors, while an embargo on imports of many food products from the island has been decreed. Nancy Pelosi left Taiwan on Wednesday for South Korea, before traveling to Japan on Saturday.
Delegates from OPEC+ (which includes cartel members and other producing nations, including Russia) have agreed to a 100,000 barrel-per-day production hike for September, OPEC says on its site. A snub for Joe Biden, who recently put pressure on Saudi Arabia. This increase marks a marked slowdown compared to the increase of 648,000 barrels per day decided for the months of July and August. The reaction was immediate, the barrel of Brent from the North Sea regaining 1% to 101.40 dollars after having lost more than 1% this morning.
Axa and Societe Generale are doing better than expected
Axa advance of 5.8%. The insurer published a net profit higher than analysts’ forecasts for the first half and announced the launch of a new share buyback program for a maximum amount of 1 billion euros.
Company General increased by 3.3%. The bank reported a lower-than-expected loss in the second quarter, as the dynamism of its activities in both retail banking and the markets offset the impact of the sale of its Russian subsidiary Rosbank.
Veolia yields 1.7%. The water and waste treatment giant announced a 22% drop in net profit to 236 million euros in the first half, mainly due to the takeover of Suez and a depreciation of its activities in Russia. The group nevertheless reported strong progress in the second quarter, citing the “successful” launch of the integration of Suez and confirming its objectives.
The automobile sector is weighed down by the lowering by BMW of its production forecast, which also warned of the deterioration of the economy. The title fell by 6% in Frankfurt. In Paris, Renault loses 2.2% and Stellantis 1.3%.
bic appreciated by 6.4%. The maker of pens, lighters, razors and promotional items has raised its forecast for revenue growth in 2022, after posting double-digit sales growth in the first half year on year.