Cac 40 down 1%, cyclical and luxury stocks under pressure, market news

Risk aversion returns to the Paris Stock Exchange in the first session of a week dominated by inflation and the first results of US companies in the second quarter. The threat of new containment measures in China following the release of Omicron’s new sub-option, BA 5.2.1, in Shanghai weighs on luxury stocks. LVMX as well as Kering the yield is about 2%.

At the same time, the main cyclical shares are affected by the fear of a complete cessation of gas supplies. The Nord Stream 1 gas pipeline, which carries most of the Russian gas to Europe, was closed on Monday for maintenance that should last a week. ArcelorMittal fall by 2.9%, Saint-Gobain by 2% and Alstom by 1.1%

Mid morning Bedroom 40 lost 1.10% to 5,966.60 points on a business volume of 430 million euros.

The Fed will get tougher

The stronger-than-expected US jobs data for June certainly reflects the resilience of the US economy, but also supports expectations of a 75 basis point Fed rate hike later in the year. In line with the evolution of contracts future for the Fed funds, this probability is completely market-driven, and the probability of a more significant tightening is estimated at 7%. As a result, US 10-year yields are back above 3% and are trading in Europe this morning at 3.0533%, along with 2- and 5-year maturities.

On Wednesday, investors will be especially on the lookout for US consumer prices in June, which should have accelerated to 8.8% on the year, a new 40-year high, after 8.6% in May. Friday’s inflation component of the University of Michigan Consumer Confidence Survey, closely monitored by the Fed, will also be scrutinized.

Banks in the red

A more aggressive Fed coupled with recession fears, especially in Europe, are supporting the US currency, which continues to strengthen against the single currency. The latter is struggling to hold on to $1.0140 after hitting a 20-year low of 1.0072 on Friday, two steps away from parity.

Economic deterioration fears are also weighing on banks, as Danish institution Danske Bank revised down its full-year earnings forecast due to rapidly rising interest rates and difficult financial market conditions. In Paris, BNP Paribas, Agricultural loan as well as Societe Generale yield from 2% to 3%.

The Q2 reporting season kicks off Thursday with major US banks such as JPMorgan, Morgan Stanley, Citigroup and Wells Fargo. Total earnings per share for S&P 500 companies is expected to rise 5.7% year on year in the three months to the end of June, according to data compiled by I/B/S Refinitiv, while estimates for the third and fourth quarters were slightly revised. way down.

EDF backed by note from JPMorgan

STMicroelectronics stable. The Franco-Italian chipmaker and GlobalFoundries have announced the establishment of a new semiconductor manufacturing plant in France. Both groups say that this is an investment of several billion euros, which will receive state support, without specifying the exact amount.

I’ll have the same thing Sanofi. The Pharmaceutical Group reported positive results from a phase III trial on prophylaxis with fitusiran in adults and adolescents with severe hemophilia A or B. The group also announced that the pivotal phase III trial on prophylaxis with ephanesoctococcus had reached its primary endpoint in patients with severe hemophilia A.

EDI receives 1.1%. JPMorgan upgraded electrician’s rating from “underpriced” to “overpriced”. The broker also raised its price target from €7.60 to €12, believing that the nationalization desired by the French government would be brought about through an offer to buy, rather than a vote on the text of the law in Parliament.” This means that minority shareholders can expect a premium for speeding up the process. ”, indicates the author of the note.

Airbus occupies 0.6%. The aircraft manufacturer announced that it delivered 295 aircraft in the first six months of the year and received 259 net orders during this period.