Cac 40 closes July with first real monthly rise this year, Market News

July was marked by a rebound in the stock market. Cac 40 (+1.72% today, 6448.5 points) closed the month up nearly 9%, its best monthly performance since November 2020 and the announcement of the first Covid vaccines. In fact, the Paris index marks here its first real progression in a month since the beginning of the year. If in March it did not fall (+0.02%), then it did not grow much either.

This Friday, the day after the release of Q2 US GDP data pointing to a strange recession, the only one that could please the stock market, solid results announced by big names in “tech luxury, banking and oil pulled the index even higher ( +3.7% for the week), despite a new batch of economic indicators that were much less encouraging, particularly in terms of inflation.

In the US, real household consumption rebounded 0.1% (+11% in nominal terms) in June, in line with expectations, after declining in the previous month, constrained by rising prices. The core PCE price index for personal consumption spending, the Fed’s most watched measure of inflation, rose 4.8% year on year after 4.7% in May. The rise in real consumption last month suggests that consumer demand is holding up despite high inflation as consumers spend their savings (personal income rose just over 0.6%). But the most important news in household spending statistics can be found on the side of the cost of employment subcomponent, with wage growth continuing. Perhaps, in the end, contrary to the hopes of the stock market, the US is far from done with inflation, and the upward trend in wages will continue to put pressure on prices in the short term.

In the eurozone, inflation hit a new high of 8.9% for the year in July, suggesting the ECB will have no choice but to react sharply in September, with a key rise of 50 or even 75 basis points. But the stock market chose to focus on the region’s unexpected 0.7% second-quarter growth acceleration (after 0.5% in the first, despite the stagnant German economy), which economist Andrew Kenningham of Capital Economics says is definitely bad. human. According to him, the momentum generated by the economy will fade and ” quick “. “Much better than expected second quarter eurozone GDP growth so far, by far the best we’ll see in a long time. The news that inflation has once again turned out to be even higher than expected only emphasizes that the economy is in for very difficult times. We expect a recession to start later this year. » These GDP figures “does not change the fact that a worsening energy crisis, soaring inflation and rising interest rates risk pushing the region into recession later this year. »

+10% for Amazon, +7% for Hermès

In New York, the Dow Jones, S&P 500 and, above all, the Nasdaq Composite are rising. The first US cap, Apple is gaining more than 3%, whileAmazon jumped more than 10% after the release of better-than-expected quarterly results last night. ExxonMobil as well as Chevron also rose sharply after the announcement of record profits caused by rising oil prices.

In Paris, Hermes shone on Cac 40 (+7.5%). The luxury saddlery maker posted strong first-half results, marked by a sharp increase in profits, a record operating margin and a stronger sales recovery in China in June than its peers.

Loreal ends profits over 4% after reporting a 25.2% increase in net income share in the first half and confirming its target to increase its turnover and results this year, above those of the global beauty market.

The largest increase Cac 40, Capgemini grew by 8.6%. SSII raised its full-year revenue growth target at constant exchange rates after a significant improvement in first-half results. Analysts say the results are even more impressive as expectations were already high.

Renault closed by more than 5%. The automaker raised its full-year targets as its half-year results were hit by the semiconductor crisis and the scaling down of its operations in Russia, but were well above analysts’ expectations.

BNP Paribas won almost 3%. The bank posted better-than-expected results for the second quarter, supported by lower bad debt provisions despite slower economic growth and strong activity, especially in the markets. They are followed by Societe Generale and Crédit Agricole with growth of 3.2% and 2.2% respectively.

Vinci went up by about 3%. The Construction and Concessions Group raised its airports division’s annual targets and reaffirmed other prospects, with net income jumping to €1.9 billion in the first half from €682 million a year earlier.

against the trend vivendi fell more than 7% after half-year revenue met expectations and earnings disappointed. The Media and Communications Group did not provide a forecast, indicating that it remains “extremely careful” due to the unstable macroeconomic situation.

With the exception of the flagship index, Air France-KLM increased by more than 4%. This year, the airline is expected to post its first positive full-year operating result since 2019, following a better-than-expected first half.