Cac 40 in green zone, contraction of US economy confirms Fed’s position, market news

The session is again volatile in the financial markets. After breaking into the red late in the morning, the Paris Bourse is back to flirting with the 6,300 threshold for the first time since June 10. The prospect of a less aggressive turn by the Fed was bolstered by an unexpected 0.9% year-on-year contraction in the US economy in the second quarter, according to the Commerce Department’s first estimate. Thus, after the fall in GDP of 1.6%, recorded three months earlier, the US economy, thus, theoretically entered into a recession. In the bond market, the yield on 10-year US bonds fell 11 basis points to 2.6714% after hitting 2.667%, the lowest level since April 14.

On the Old Continent, consumer price growth accelerated in Germany, hitting 8.5% yoy in July, where the market was hoping for a slowdown to 8.1% from 8.2% in June. In addition, economic sentiment in the euro area worsened in the same month, with the Eurostat index falling 4.5 points to 99, its lowest level since February 2021, due to recession fears.

Around 16:00, Bedroom 40 added 0.64% to 6,298.03 points after a peak of 6,308.46 (+0.80%) on a business volume of 1.85 billion euros. In New York Dow Jones gives 0.59% and NASDAQ Composite 1.03%. Meta gives 8.5%. Last night, Facebook’s parent company announced its first-ever drop in quarterly turnover. Apple as well as Amazon will publish its results after Wall Street closes.

Growth of megarates behind?

The Fed, as expected, raised the main key rate by 75 basis points for the second time in a row, bringing it to the range of 2.25% -2.5%. During his press conference, Jerome Powell showed determination to fight inflation in an attempt to calm expectations of the next tightening of monetary policy. In particular, he pointed out that ” at some point it would be appropriate to slow down ‘ without giving details.

Falling commodity prices and easing supply pressures suggest that inflation in the commodity sector should slow down. However, consumer price dynamics may remain problematic, while service sector inflation will take time to reverse. As a result, the risk remains that the Fed will have to trigger a recession in order to regain control of inflation. says Keith Wade, chief economist at Schroders.

Mike Wilson, chief US equities strategist and chief investment officer at Morgan Stanley, warned against the temptation to bet on stocks despite the rally following the Fed’s decision. Asked on CNBC, he said that ” the market always rises as soon as the Fed finishes raising rates, until a recession hits. But he feels that unlikely that the time lag between the end of the tightening campaign and the recession is significant. In the end it will be a trap “, he concludes.

Jerome Powell also indicated that the next decisions will be made meeting by meeting, suggesting that perhaps a less restrictive approach will depend on economic performance.

Schneider Electric and Ipsen in sight, Scor damaged

Schneider Electric advance payment 5.9%. The electrical equipment maker raised its 2022 operating profit and revenue growth targets after posting strong first-half results.

stellantis rose by 4.5%. The automaker has announced new record results, margins achieved on its electrified Jeep, Fiat and Peugeot vehicles have enabled it to excel in the context of ” especially difficult “.

Vice versa, Airbus flounder by 4.1%. The aircraft manufacturer has lowered its aircraft delivery plan for 2022 and has postponed the production of 65 aircraft per month for the A320 family to early 2024 due to difficulties encountered in its supply chain. Now Airbus expects to deliver about 700 aircraft this year, not 720. The rest of the targets remain.

Total Energy loses 2.9%. The oil group certainly posted record second-quarter earnings, but analysts are disappointed with the share buyback program they were hoping for.

teleplay lose 4%. The outsourcing customer service giant reported slightly better-than-expected first-half revenue and maintained its full-year guidance. Citi analysts view the confirmation as “conservative”.

check fell 15.6% after posting a net loss of 239 million euros in the first half of the year against a profit of 380 million a year earlier. The drought in Brazil, the war in Ukraine and the continuation of the Covid epidemic have particularly affected productivity.

Ipsen jumped 16%. e Pharmaceutical Company has set targets for 2022 after releasing robust half-year results.

Accor a 10% drop despite the announcement of a sharp recovery in its second-quarter results. But annual projections are considered ” stupid analysts.