Cac 40 loses more than 1%, cyclicality and luxury under pressure, Market News

After a weekly gain of 1.7%, the Paris stock exchange fell in the first exchanges at the start of the week, which will be dominated by inflation and the first results of the second quarter of American companies. The risk of new containment measures in China and fears of gas shortages are also influencing this trend.

A little after 9:30 in the morning at Bedroom 40 lost 1.42% to 5,947.64 points with a business volume of 260 million euros.

June’s US jobs numbers beat expectations, certainly reflecting the resilience of the US economy, but also bolstering expectations for a 75 basis point Fed rate hike at the end of the month. According to the evolution of contracts future for Fed funds, this probability is estimated by the market at 100%, while a more significant increase is estimated at 7%. As a result, the yield on the US 10-year note climbed back above 3% and traded at 3.0775% this morning in Asia, as did the 2- and 5-year notes.

The Fed will tighten

On Wednesday, investors will be particularly keen to watch U.S. consumer price inflation in June, which was expected to accelerate to 8.8% over one 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 watched by the Fed, will also be scrutinized.

A more hawkish Fed, coupled with fears of a recession, especially in Europe, is supporting the US dollar, 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, within two steps of parity. BNP Paribas, Agricultural credit and Sausage General yield from 2% to 3%.

Second-quarter earnings season kicks off Thursday with major U.S. banks including JPMorgan, Morgan Stanley, Citigroup and Wells Fargo. Total earnings per share for S&P 500 companies are expected to have risen 5.7% year over 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 up. . down

The industry fears the cessation of Russian gas

Excluding Tokyo, Asian markets were in the red this morning with China’s CSI 300 down more than 2% and Hong Kong’s Hang Seng down more than 3%. The emergence of a new variant of Covid 19, Omicron BA 5.2.1, spotted in Shanghai is under question, raising fears of new restrictions. The country is one of the main markets for the luxury sector, which is in sharp decline. in Paris, LVMH, Kering and Hermes yield from 1.3% to 3%.

Major cyclical stocks fell on fears of a complete cut in gas supplies. The Nord Stream 1 pipeline, which carries most of Russia’s gas in transit to Europe, was shut down on Monday for maintenance that is expected to last a week. ArcelorMittal a drop of 3.7%, Saint-Gobain by 2.6% and Alstom 2.5%

STMicroelectronics registered a limited decrease of 0.4%. The Franco-Italian chip maker and GlobalFoundries have announced the creation of a new semiconductor manufacturing plant in France. Both groups say they are talking about investments of several billion euros, which will receive state support, without specifying the exact amount.

the same for me Sanofi (-0.3%). The pharmaceutical group reported positive data from a phase III trial of fitusiran prophylaxis in adults and adolescents with severe hemophilia A or B. The group also announced that a pivotal phase III trial of efanesoctocog prophylaxis in patients with severe hemophilia A met its primary endpoint.

EDF earns 1.5%. JPMorgan raised its recommendation on the electrician from “underweight” to “overweight.”