The Paris Stock Exchange fell and Wall Street should follow at the open as tensions mount between Beijing and Washington over a possible visit by Nancy Pelosi to Taiwan. Combined with growing concerns about global growth, this episode is undermining the ongoing rebound that allowed major financial centers to achieve their best results since 2020 in July. August and September have been the worst two months of the year for the S&P 500 over the past three decades.
Around 14:30, Bedroom 40 lost 0.43% to 6,409.15 points with a business volume of 900 million euros. Contracts future on American indices, the yield is from 0.6% to 0.8%. Caterpillar fell 3.9% in premarket New York due to quarterly turnover below expectations, the construction and mining equipment giant cited slowing sales in China in particular. Vice versa, Uber jumped more than 13%. If the quarterly profit disappointed, then the turnover turned out to be better than expected. In addition, the VTC specialist received his first positive cash flow.
Beijing warned of the consequences of a possible visit by the speaker of the US House of Representatives to Taiwan, which China views as an integral part of its territory. Nancy Pelosi, who is on tour in Asia, will land on the island on Tuesday at 10:30 pm local time, according to the Liberty Times. On this occasion, she was able to meet with President Tsai Yingwen in a meeting of the highest caliber of an American parliamentarian on the island for 25 years.
Technology and luxury under pressure
This morning, several Chinese fighter jets flew over an area near the Taiwan Strait demarcation line, a source familiar with the operations said. Financial Times. ” All eyes will be on the Chinese military to see how they react if Pelosi does go to Taiwan. wrote Edward Moya, market analyst at Oanda, in a note early this morning.
Semiconductor manufacturers are among the victims of this tension, as much of the chip production is in Asia. The European Stoxx 600 Tech Index fell 2.1%.
Sensitive to the political and economic situation in China, the luxury goods sector is also retreating. LVMX as well as Kering lose 1.9% and Hermes 0.9%.
On the contrary, values related to protection are circled. Thales thus occupies 1.7% and Dasso Aviation 1.4%.
On sovereign debt, US 10-year bond yield hit a four-month low of 2.4982% this morning and then bounced back to around 2.55% (bond prices rise when yields decline) thanks to a “flight to quality.” The bond market is buoyed by hope that a slowdown in US activity could prompt the Fed to be less hawkish while acting as a safe haven for investment ahead of a possible Nancy Pelosi visit to Taiwan.
Sanofi supports Bank of America
In the SRD, Vilmorin increased by 5.3%. The seed company posted a 6.2% increase in turnover compared to the 2021-2022 financial year and raised its full-year forecasts after lowering them in May.
The largest increase Cac 40, Sanofi increases by 2.5%. BofA raised its estimates, including its earnings-per-share forecast, after its second-quarter results. The writer of the note reiterated his buy recommendation, noting that the group’s growth and sales funnel improvement are “underestimated”.
ADP increased by 1.8%. HSBC has upgraded its recommendation on the name of the airport’s operator from ‘lighten’ to ‘keep’. On the other hand, Societe Generale downgraded Nexans from “buy” to “hold”. Shares in the cable maker shed 1.4%.
Exclusive networks occupies 6.4%. The turnover of a provider of cybersecurity services and technologies for companies for the first time in history exceeded the billion mark.