Cac 40 loses more than 1%, cyclical stocks and luxury under pressure, market news

After a weekly gain of 1.7%, the Paris Stock Exchange fell on the first exchanges at the beginning of the week, which will be dominated by inflation and the first results of US companies in the second quarter. The risk of new containment measures in China and concerns about gas shortages are also weighing on the trend.

Shortly after 9:30 am, Bedroom 40 lost 1.42% to 5,947.64 points with a business volume of 260 million euros.

The stronger-than-expected US jobs data for June certainly reflects the resilience of the US economy, but also reinforces expectations for a 75 basis point Fed tightening at the end of the month. In line with the evolution of contracts future for Fed funds, this probability is estimated by the market at 100%, 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 at 3.0775% this morning in Asia, along with 2- and 5-year maturities.

The Fed will get tougher

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. The inflation expectations component of the University of Michigan Consumer Confidence Survey, which is closely monitored by the Fed, will also be scrutinized.

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. 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.

Industry fears shutdown of Russian gas

With the exception of Tokyo, Asian markets were in the red this morning, with China’s CSI 300 down over 2% and Hong Kong’s Hang Seng down over 3%. A new Covid 19 variant, Omicron BA 5.2.1, seen in Shanghai is in doubt, raising fears of new restrictions. The country is one of the main markets for the luxury sector, which is experiencing a sharp decline. In Paris, LVMX, Kering as well as Hermes yield from 1.3% to 3%.

Major cyclical stocks fell due to fears of a complete cessation of gas supplies. The Nord Stream 1 gas pipeline, which carries most of the Russian gas in transit to Europe, was closed on Monday for maintenance that should last a week. ArcelorMittal fall by 3.7%, Saint-Gobain by 2.6% and Alstom 2.5%

STMicroelectronics reported a limited decline of 0.4%. 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 (-0.3%). 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 earns 1.5%. JPMorgan upgraded electrician’s rating from “underpriced” to “overpriced”.