Posted Oct 19, 2022 11:14 AM
The Paris Stock Exchange is struggling to extend its recent rebound, in a market torn between better-than-expected results from American companies and the persistence of inflationary pressures across the Channel and in the euro zone. The market is also awaiting the publication of the US Federal Reserve’s Beige Book in the evening.
Shortly after 11 a.m., the Bedroom 40 takes 0.25% to 6,082.25 points after a peak at 6,096.11 (+0.47%) in a starving business volume of 400 million euros.
Consumer prices rose by 9.9% over one year in September in the euro zone, slightly less than the 10% announced in the first estimate, but the acceleration is very real after the 9.1% for the month of ‘august. In the UK, the inflation rate reached 10.1% last month, returning to its July highs. Enough to fuel the debate on a strong reaction from the ECB next week and the Bank of England on November 2. The latter has also announced that it will start the 1er November the process of selling bonds acquired under its asset purchase program. Initially, long maturities will not be affected by these disposals.
Fragile optimism
In the USA, Goldman Sachs closed the ban on major banks’ quarterly publications on Tuesday with better-than-expected trading revenue results, joining Bank of America or JPMorgan. In another area, Netflix recorded a stronger than expected rebound in the number of its subscribers in the third quarter and the title of the streaming giant jumped 12.8% in pre-market transactions. Tesla will present its accounts after the close of Wall Street.
Strong corporate earnings, low valuations and the UK government’s fiscal U-turn helped to rekindle appetite for risky assets. But this optimism could be undermined as many challenges remain. “Analyst Consensus Earnings Projections Subject to Revisionswarns Terry Sandven, chief equity strategist at US Bank Wealth Management. Inflationary trends, hawkish comments from the Fed and a slowdown in profit growth in 2023 are the main elements weighing on investor sentiment and stock prices “, he recalls.
On the bond market, the yield on the 10-year US bond tightened by 6 basis points to 4.06% a few hours before the publication of the Fed’s Beige Book. It should provide an overview of the evolution of the economy over the past few weeks, which will serve as a working basis for the monetary policy committee for its meeting in early November.
Veolia boosted by Morgan Stanley
Veolia Environment p2% growth. Morgan Stanley went from “underweight” to “overweight” on the title of the specialist in water and waste management. Among other analyst notes, Citi raised its price target from Publicis from 90 to 95 euros. The action gained 1.4%.
Conversely, Sartorius Stedim Biotech fall of 13.8%. The supplier of products and equipment for the pharmaceutical industry experienced a major slowdown in the third quarter, due in particular to lower demand in the field of Covid. The annual growth objectives are revised downwards, even if those related to margins are maintained.
Virbac loses 6.4% The veterinary laboratory has refined several of its annual objectives, after having suffered a decline of 0.2%, at constant scope and exchange rates, of its turnover in the third quarter. For 2022, it now expects a ratio of “current operating income before amortization of assets resulting from acquisitions” of between 14% and 15% at constant exchange rates.