Cac 40 late rebound, Fed manages to ease rate hike expectations, market news

The Paris Stock Exchange and Wall Street endure a recent weekend shaken by accelerating U.S. inflation as U.S. daily indicators, including stronger-than-expected June retail sales growth and improved consumer confidence, argue for a big uptrend. Fed interest rate at the end of the month. The Fed funds rate is currently in the range of 1.5% to 1.75% after the decision was made in June to raise it by 75 basis points.

Nonetheless ” Two central bank officials have managed to debunk the idea of ​​a 100 basis point rise, saying they prefer a 75 basis point rise for now. says Craig Erlam, market analyst at Oanda. However, he clarifies his remarks by recalling that ” this will obviously depend on economic statistics. So James Bullard and Christopher Walker might change their minds in the meantime. “.

Citi beat expectations in the second quarter

Around 16:15, Bedroom 40 added 1.45% to 6,001.03 points with a trading volume of 1.7 billion euros. In Milan FTSE Eb rose by 1.10% the day after falling more than 3% after the announcement of the resignation of Council President Mario Draghi, then refused by the President of the Republic. In New York Dow Jones increased by 1.73%, and NASDAQ Composite by 1.09%.

On the corporate front Citygroup suffered a 27% drop in profit to $4.5 billion in the second quarter after an increase in bad debt provisions, while its investment banking division was hit by a slowdown in mergers and acquisitions. Earnings per share, however, came in at $2.19 versus $1.66 expected by the market, thanks in part to trading activity and rising interest rates. The share rose by 9%. Wells Fargo for its part rises by 6.4%. The San Francisco-based bank did report a 48% drop in second-quarter profit to $3.1 billion, in part due to a $580 million allowance for credit loss risk. Earnings per share fell to 74 cents from $1.38 a year earlier.

Luxury weighed down by China

As a result of repeated restrictions, China’s GDP contracted by 2.6% in the second quarter compared to the first, while on an annualized basis it grew by only 0.4%. The consensus formed by Bloomberg expected -2% and +1.2%, respectively. These figures suggest that it will be difficult for Beijing to reach its 5.5% GDP growth target this year.

Luxury goods stocks, of which the country is one of the main markets, are losing ground, especially as the number of new Covid 19 infections has reached its highest level in two and a half months. LVMX loses 0.9% and Kering 1.7%. The sector is also affected by the slowdown in the quarterly activity of the Swiss richmont in China, while the British Burberry suffered containment measures. The former fell 4.6% in London and the latter 4.3% in Zurich.

Weakness, however, offset by a 3.1% increase Total Energy. The Group announced that it expects exceptional results in the refining and chemical industries in the second quarter. He adds that his refining margin has more than tripled over the period.

The largest increase Cac 40, Renault grew by 5.1%, and equipment manufacturers fauresia as well as Valeo win 4.5% and 3.7% respectively. BofA Securities believes that concerns about the automotive sector are exaggerated. According to the author of the note, the reduction in Russian gas supplies to Europe could stop production for several quarters, but the resumption of flows will lead to a rally during the reporting season for the second quarter.

Dasso Aviation increased by 3.4%. JPMorgan took over the Falcon and Rafale manufacturer’s name with a “neutral” target of €162. Airbus wins for its part 4.3%.