Cac 40 continues to decline, activity in the euro area is the lowest in almost a year and a half, market news

The Paris Stock Exchange continues to decline, and a more aggressive turn by central banks on interest rates heightens fears of a recession. The slowdown was also reflected in the June private sector polls. The S&P Global consolidated PMI index (synthesis between industry and services) fell to a 16-month low of 51.9 points. Germany has suffered the most: enlargement has been the lowest since December and France the lowest since January.

About 10:30 a.m. Bedroom 40 fell 1.11% to 5,850.88 points with a business volume of 540 million euros.

Sensitive to demand, oil and other commodity prices bear the brunt. The risk of declining demand due to the economic slowdown weighs on oil prices, which are moving to lows for more than a month. A barrel of Brent fell 1.6% to $ 109.84, and a barrel of WTI quality is dangerously moving to the $ 100 threshold of 104.23. Joe Biden has asked Congress to pass a three-month suspension of the federal tax on gasoline and diesel. In Paris, TotalEnergies decreased by 1.1% and Vallourec from 1%. Among other values ​​related to raw materials, ArcelorMittal loses 1.9% and Eramet 5.5%.

An increase of 75 basis points in July?

Jerome Powell reiterated yesterday that the US Federal Reserve firmly set to reduce inflation “, A statement stating that the Fed will continue the cycle of serious tightening of monetary policy. Speaking before the Senate Banking Committee, the Fed chairman even uttered the famous “R-word”, recognizing that a large increase in rates could lead to a contraction in the economy and a soft landing. it would be very difficult adding that the recession was ” definitely an opportunity “.

For observers, the speech does not add much compared to last week’s press conference after the FOMC. But ” his persistence in insisting on convincing evidence that inflation is falling suggests that Fed officials will repeat a sharper increase of 75 basis points last week at their July meeting. says Michael Pierce of Capital Economics.

For Chris Weston of Pepperstone: « It is clear that the market considers the recession to be extremely likely, according to Powell, who explained that the recession was an opportunity, but not their intention. “.

Jerome Powell will address the House Finance Committee this afternoon as part of his six-month statement on monetary policy to Congress, but nothing significant is expected.

Deutsche Bank raises Eurofins, Valnova removed

On the macroeconomic front, the US Department of Labor will release weekly unemployment data this afternoon. S&P Global will release its private sector activity indices in June’s rapid data across the Atlantic.

Stellantis decreased by 1.4%. The automaker has announced the closure of its plant in Rennes due to a shortage of semiconductors, and the plant in Sochaux was extended until the end of next week.

Eurofins Scientific increased by 2.2%. Deutsche Bank has raised its name recommendation from “sell” to “hold”, keeping the target price at 80 euros. The same broker initiates hedgingUbisoft (+ 0.4%) for a “purchase” with a target price of 60 euros.

Athos in advance by 6.7%. Thales will have the support of the Ministry of Economy and Finance and the Directorate General of Armaments to try to take over the activities of the Digital Cyber ​​Security Services Group, BFM Business.

finally, Valneva suspended from trading pending a press release.