Hesitant during most of the session, the Paris Stock Exchange returned to the green, encouraged by the rebound on Wall Street after its bearish reversal the day before. Some investors believe the market has largely priced in the prospect of an economic slowdown, while many analysts warn of the risk of a market relapse and recommend increasing the proportion of cash in portfolios.
25 or 50 basis points?
Around 4 p.m., the Bedroom 40 gained 0.84% to 6,142.92 points in a listless business volume of 1 billion euros. The market remains prey to high volatility at the start of the second quarter earnings season, in Europe and the United States. In New York, the Dow Jones recovers 0.83% and the Nasdaq Composite 1.08%. Banks JPMorgan Chase, Morgan Stanley, Goldman Sachs and Bank of America hold the upper hand with gains of around 2%. Conversely, Netflix lost 1% while the video streaming platform must publish its quarterly after the close of Wall Street.
On the occasion of its first monetary tightening since 2011, the ECB could opt on Thursday for an increase of 50 basis points, or double what was announced last month, reports Bloomberg, citing sources familiar with the discussions. According to these same sources, Christine Lagarde is stepping up her efforts to try to reach an agreement on an anti-fragmentation mechanism, which remains to be finalized. This tool, intended to protect the most fragile countries in the euro zone, is the subject of negotiations within the Board of Governors with a higher than announced increase in key rates as a bargaining chip. Information that benefits banks, whose associated European Stoxx 600 index signs the best sector performance. In Paris, Societe Generale increased by 2.3%, while Agricultural credit and BNP Paribas appreciate by more than 1%.
The State offers 12 euros per EDF share
The euro strengthened for its part by more than 1% to 1.0254 dollars after briefly falling below parity on Friday for the first time in 20 years. On the bond market, the yield of the 10-year German Bund, which serves as a benchmark within the euro zone, tightened by 4 basis points to 1.2490%.
Bloomberg reported last night that Apple intends to limit its recruitment and investments in several key areas next year in anticipation of an economic slowdown. The Apple brand’s European suppliers are generally down, which weighs on the technology’s Stoxx 600. In Paris, STMicroelectronics loses 1.1%.
EDF, whose quotation resumed on Tuesday, rose by nearly 15%. The French government has announced that it plans to launch an offer at 12 euros per share on the balance of the capital of the electrician that it does not yet hold with a view to delisting it. It will also offer 15.64 euros per Oceane (bond convertible into new or existing shares). Its competitor Engie gains 1.9%.
Danone gained 2% as Berenberg raised its recommendation on the stock from “sell” to “hold”.
Neoen and Voltalia degraded
Alstom fell 6.5% after the announcement of revenues and orders for the first quarter of its financial year at the end of March 2023 broadly in line with analysts’ forecasts. Several analysts also point out that the title of the railway equipment manufacturer has outperformed in recent days. The group confirmed its objectives for the full year, while recalling that inflation and shortages of components will have an impact on its activity.
ADP appreciated by 1.9%. The airport operator raised its traffic assumptions for 2022 while in the first half, its traffic reached 118.2 million passengers, including 37.5 million for Paris Aéroport, respective increases of 71.9% and 71, 6% compared to the corresponding period of 2019.
Neoen gives up 5.9%. Morgan Stanley downgraded the renewable energy producer’s stock from “line weight” to “underweight” over valuation concerns. The broker also lowered its recommendation on Voltalia (-4.2%) from “overweight” to “line weight”.