Cac 40 growth continues, but the week promises to be difficult for the markets, morning meeting

After the white week, the Paris Stock Exchange should open on a positive note after a sharp recovery on Wall Street on Friday. But the next few days promise to be challenging as the monetary decision of the European Central Bank is expected to prepare to raise its interest rates by 25 basis points.

Another major development in Europe is the completion of maintenance work on the Nord Stream 1 gas pipeline, scheduled for Thursday, which raises the question of whether gas supplies to the Old Continent will resume. Some European officials fear that the Russian authorities will use gas weapons as a means of pressure in the face of sanctions related to the war in Ukraine. A factor that the ECB will also have to take into account.

Toward a “limited” tightening to 75 basis points

In New York, the three major indexes rose about 2% on Friday, helped by a feeling that the US Federal Reserve will “cap” its next tightening to 75 basis points next week. These expectations are further supported by an article in wall street magazine that the central bank supports this option, thereby agreeing with the comments of Governor Christopher Waller and St. Louis Fed President James Bullard, who are considered the most hawkish.

The American financial newspaper had previously ignited debate about potential leaks in the Federal Reserve when it anticipated a 75 basis point hike passed in June.

Last week, a 9.1% year-on-year rise in US consumer prices in June heightened fears of a mega tightening of monetary policy by the Fed, leading to a 100 bp increase in the Fed’s funds rate. However, those expectations eased somewhat, in part due to the slowdown in inflation expectations reflected in the University of Michigan consumer confidence survey.

While Friday’s rebound provided welcome relief, it doesn’t change the fact that markets have been more invested in the prospect of a sharp global economic slowdown and that the general trend to sell the rebound continues. summarizes Michael Hewson, chief market analyst at CMC Markets. Commodity prices have fallen recently, with oil prices hitting their lowest level since February amid fears of a recession.

Three Cac 40 companies in a race

The Q2 reporting season enters its first major straight period with releases from Bank of America, Goldman Sachs and IBM on Monday, with releases from Netflix, Tesla and Twitter expected in the coming days. In France, three components of the Cac 40 will participate in the exercise from Tuesday: Alstom, Publicis and Thales.

On the foreign exchange market, the euro is trading near $1.02 after falling below parity at $0.9955 for the first time in 20 years last week.

On the cost side, Solve plans to raise its forecast for 2022 after strong performance in the second quarter. The chemical group expects second-quarter sales of between 3.4 and 3.5 billion euros based on preliminary data and underlying gross operating income of between 855 and 865 million euros. Quarterly reports will be published on July 28.

Stellantis will implement an “orderly closure” of its joint venture with China’s GAC, which makes and sells Jeeps in China.. The Automotive Group recognizes a non-cash impairment loss of around €297 million in its 1H22 results.

Airbus. On Friday, British justice found the aircraft manufacturer wrong in the technical aspect of its dispute with Qatar Airways over the security of its A350 aircraft, given that the group could not take advantage of a French law known as “lockdown”, which prohibits the transfer of sensitive information to foreign nationals. entities.

EDI. The Association of employee-shareholders and former employees of the group announced its intention to ” file a criminal complaint with a civil suit “against the state for” business disaster EDF stock remains delisted until further notice and the state will announce its intentions to nationalize the electrician no later than Tuesday.