Paris: limited response despite rate at 1.85% & Brent barrel at $123 – 06/08/2022 at 19:31
(CercleFinance.com) – The Paris stock market reached the session with a decline of 0.8%, to 6,448 points, notably weighed down by Danone (-2.8%) and Pernod Ricard (-2.5%).
The trend is expected to be the same in Frankfurt (-0.8%) and on the E-Stoxx50 (-0.5%) while London only drops 0.1%.
At mid-session, the US indices fell fairly evenly: -0.7% on the Nasdaq, -0.8% on the S&P500, -0.9% for the Dow Jones.
The ‘fact’ of the day is the further deterioration of the bond markets as the barrel of ‘Brent’ soars towards $123 (it is heading for its worst closing of the year 2022, it just needs to break through 123.3 $) and the ‘WTI’ crosses the $121 mark in New York.
After the World Bank on Tuesday, the OECD in turn lowers its growth forecast in the world in 2022 to 3% against 4.5% previously (i.e. -33%) and in Europe from +4.3% to + 2.6% (i.e. -40%)…. and for France, it will be +2.4% against 4.2%. The OECD is also revising its inflation estimate upwards to +8.5% (+4.3 Pts).
For the record, the World Bank lowered growth in the euro zone to +2.6% the day before, and that of the United States to 2.5% for 2022.
Faced with still very high inflation, investors will be watching with interest the ECB’s announcements scheduled for tomorrow. The central bank should logically show its intention to continue the process of monetary normalization which started last December.
Its board of governors will likely decide to end its regular asset purchase program (APP) and prepare the market for rate hikes in July and September, the first in 11 years.
Investors are also waiting with some excitement for the consumer price statistics in the United States, which will be published on Friday and which are also likely to consolidate the market rebound or, on the contrary, to make them plunge again.
On the US sovereign yields market, the start of the day was marked by a new episode of tension, with 10-year Treasury bonds once again rising above the symbolic threshold of 3% (+4.5 Pts to 3.017 %).
In the euro zone, our OATs added +1pt to 1.876%, Bunds also +7.2pts to 1.3590%, BTPs +10% to 3.491%.
Note, a +50 Pts increase in the key rate this morning the day after an identical initiative by Australia.
Moreover, the euro is gaining a little in value against the greenback and is now trading against $1.0738, while a barrel of Brent from the North Sea has gained nearly 1.4%, to $122. Transporting it is a fond memory for cryptocurrency enthusiasts. Bitcoin is down more than 3%, at $30,400.
In this context, investors were able to take note this morning of the figures for France’s trade balance. This shows a deficit of nearly 12.4 billion euros for April, compared to a deficit of 11.8 billion euros the previous month, according to CVS-CJO data from the customs administration.
This slight month-on-month improvement reflects a 1.6% increase in French exports, to more than 46.7 billion euros, even as imports remained almost stable (+0.4%). around 58.9 billion euros.
Across the Rhine, after a drop of 3.7% in March (revised figure from an initial estimate which was -3.9%), German industrial production increased by 0.7% in April at a rate sequential, according to the federal statistics office.
On the US indicators side, investors took notice of wholesale inventories in the United States: they fell 2.2% in April sequentially, according to the Commerce Department, after increasing 2.7% in the month. previous (figure revised from an initial estimate which was +2.3%).
Wholesale sales for their part rose by 0.7% in April. At the current rate of sales, it takes US wholesalers 1.25 months to sell their inventory, an increase from 1.23 the previous month.
Finally, in company news, Schneider Electric says it has reached an agreement with Watlow Electric Manufacturing Company, a global producer of complete industrial thermal systems, to sell its Eurotherm business to it.
Atos dropped more than 3.5% and thus underperformed the trend in Paris, against the backdrop of comments presented by Oddo BHF, which reiterated its ‘underperformance’ opinion on the title of the IT services group, despite a target of price raised from 21.5 to 23 euros.
The research department considers that ‘the risk/reward still does not seem favorable ahead of the CMD’ on June 14, which it believes is ‘the subject of growing market expectation’, and indicates that the valuation seems to him ‘too rich’.
Getlink is the owner of record traffic (since the summer peaks of 2020) for its Eurotunnel shuttles, on the occasion of holiday departures for the British ‘half-term’ and Queen Elizabeth II’s Platinum Jubilee.
Getlink also points to attendance that has more than doubled compared to 2019 for the Flexiplus service and underlines the return of duty free sales in its Folkestone and Coquelles stores, following the United Kingdom’s exit from the EU.
Finally, ID Logistics announces its establishment in Italy with the opening of a logistics platform in Casei Gerola, located between Genoa and Milan, and where 350 employees work there daily (up to 500 at peak times).