Cac 40 continues to decline, Eurozone activity at its lowest level in nearly a year and a half, Market News

The Paris Stock Exchange continues to decline as central banks’ more aggressive approach to interest rates fuels fears of a recession. The slowdown is also reflected in private sector activity surveys for June. The S&P Global Composite PMI (synthesis between industry and services) fell to a 16-month low of 51.9. Germany was hardest hit, with growth at its lowest since December, and France at its lowest since January.

Around 10:30 am Bedroom 40 down 1.11% to 5850.88 points on a business volume of 540 million euros.

Demand-sensitive prices for oil and other commodities bear the brunt of this. The risk of reduced demand due to the economic downturn weighs on oil prices, which are nearing their lows in more than a month. A barrel of Brent slipped 1.6% to $109.84, while a barrel of WTI is dangerously close to the $100 threshold at $104.23. Joe Biden has asked Congress to pass a three-month suspension of the federal tax on gasoline and diesel. In Paris, Total Energy down 1.1% and Vallorec from 1%. Among other values ​​associated with raw materials, ArcelorMittal loses 1.9% and Eramet 5.5%.

Up 75 basis points in July?

Jerome Powell confirmed yesterday that the US central bank ” determined to bring down inflation ”, a message that suggests the Fed will continue its cycle of severe monetary tightening. Speaking before the Senate Banking Committee, the Fed chairman even said the famous “R word”, acknowledging that a significant rate increase could lead to a contraction in the economy and a “soft landing”. it would be very difficult adding that the recession was ” definitely a possibility “.

For observers, this speech does not add much new compared to the press conference after the Fed meeting last week. But ” his insistence on the need for hard evidence that inflation is falling suggests Fed officials will repeat last week’s sharper 75 basis point hike at their July meeting. says Michael Pierce of Capital Economics.

For Chris Weston of Pepperstone: ” What is clear is that the market sees a recession as very likely, a sentiment heard from Powell, who clarified that a recession is possible but not their intention. “.

Jerome Powell will testify before the House Finance Committee this afternoon as part of his semi-annual monetary policy statement to Congress, but nothing significant is expected.

Deutsche Bank raises Eurofins, Valneva suspended

On the macroeconomic front, the US Department of Labor is to release weekly data on jobless claims this afternoon. S&P Global is releasing its private sector activity index as live data for June across the Atlantic.

stellantis decreased by 1.4%. The automaker announced the closure of its Rennes plant due to a shortage of semiconductors, while the Sochaux plant was extended until the end of next week.

Eurofins Scientific increased by 2.2%. Deutsche Bank upgraded the stock from Sell to Hold, maintaining its target price at 80 euros. The same broker initiates the hedgingUbisoft (+0.4%) to “buy” with the goal of 60 euros.

Athos advance payment 6.7%. According to the data, Thales will receive the support of the Ministry of Economy and Finance and the Directorate General of Armaments to try to take over the cybersecurity digital services group. BFM Business.

Finally, Valneva suspended from trading pending press release.