Recession fears push Cac 40 back to four-month lows, market news

The Paris Stock Exchange is highlighting its losses as recessionary fears take precedence over hope sparked by discussions between Washington and Beijing on tariff cuts. While private sector activity picked up again in China, it slowed markedly in the euro area in June. “increased risk of contraction of the region’s economy in the third quarter “, according to the chief economist at S&P Global, which conducts PMI research.

In addition, a strike by Norwegian oil rig workers on Tuesday to seek higher wages is fueling fears of an energy shock and price tensions. Investors are also waiting for the results of the season to assess the companies’ resilience to rising costs and supply constraints.

Around 14:30, Bedroom 40 fell 2.38% to 5,811.45 points after a low of 5,798.36, unknown since March 7, on a business volume of 1.1 billion euros. Contracts future on American indices, the yield is more than 1%.

Biden ready to cut tariffs

At the European level, the most cyclical sectors were particularly affected, such as basic resources (-3.4%), automotive (-2.3%) and oil and gas (-1.9%). ArcelorMittal free 4.5%, Michelin 4.4% Valeo 5.6% and Total Energy 3%.

Joe Biden may announce tariff cuts on Chinese imports by about $300 billion this week in an attempt to curb inflation. wall street magazine. Chinese Premier Liu He and US Treasury Secretary Janet Yellen discussed tariffs and supply chain issues this morning via videoconference. And the dialogue was “constructive,” according to the Chinese Ministry of Commerce, which added that the two sides agreed to better coordinate their macroeconomic policies.

Central banks on the move

The central bank’s actions remain a major concern for investors as the Bank of Australia raised its benchmark interest rate by 50 basis points for the second consecutive time, the highest in the institution’s history. The US Federal Reserve is due to release the minutes of its June meeting on Wednesday, and the ECB will do the same on Thursday.

According to John Velis, strategist at BNY Mellon, the market did not take into account the Fed’s message. He points out that Jerome Powell stepped up his speech by insisting that his commitment to bring inflation back to 2%, a process that would ” it probably hurts a lot “.

In the bond market, US Treasury yields are rising again after cutting on Monday due to a national holiday. The 10-year bond rate is aiming for 2.86% vs. 2.8803% at Friday’s close, while remaining below the 3% threshold. German bonds with the same maturity slipped to 1.2370% after jumping 11 basis points on Monday. In the foreign exchange market, the US dollar also acts as a safe haven, with the euro up more than 1% to $1.0298 after hitting a nearly 20-year low of 1.0281.

Rémy Cointreau Upgraded, Crédit Agricole Downgraded

against the trend Remy Cointreau rose 2.6%, supported by Jefferies’ rating upgrade from Hold to Buy. The broker believes that the opening of China should be favorable for the French group in the face of a potential slowdown in other markets.

Vice versa, Publicis fell 5.4% as Goldman Sachs downgraded its rating from Buy to Neutral.

Thales down 5.8% after falling more than 12% at Rheinmetall in Frankfurt. Deutsche Bank estimates that the armaments and automotive conglomerate’s performance should be in the lower end of the range for its second-quarter guidance.

Agricultural loan declined 3.5% as Deutsche Bank moved from a buy to a hold.

JCDecaux a drop of 10.6%. Goldman Sachs has lowered its price target for the title from €21 to €16, while maintaining its “sell” sentiment.

Finally, Deser lost up to 25% compared to the initial price for the first trading session. In an environment dominated by rising interest rates, investors are reluctant to invest in technology stocks.