The Paris stock exchange opened higher at the start of the first full week of the third quarter. However, the day promises to be particularly quiet due to the closure of US markets on Independence Day.
At 9:10 in the morning Bedroom 40 gained 0.80% to 5978.25 points.
The next few days will be filled with leading indicators, including the release on Wednesday of the minutes of the Fed’s monetary policy committee last month, as well as the June employment report in the United States. But before that, at the end of the morning, investors will pay attention to the change in producer prices in the Eurozone in May. The consensus compiled by Bloomberg calls for growth to slow to 36.6% for the year after 37.2% in April.
From recession to inflation
Signs of an economic downturn are multiplying, both in the United States and elsewhere, and now they appear in every statistic, whether it’s consumer spending or industrial activity. Thus, the prospect of a recession takes precedence over the sole fears of inflation. Market psychology has sharply shifted from inflation considerations to strongly growth-oriented sentiments “Summaries Chris Weston, head of research at Pepperstone Group, quoted by Bloomberg. He adds that there is now a risk that the Fed will be too slow to reverse the rate hike trend.
The market is pricing in an 85% chance of a 75 basis point Fed rate hike at the end of the month and a 3.25% to 3.5% chance of a year-end month-end value of money. It also expects the policy to cut interest rates in 2023 and 2024 amid growing risks of recession, NAB economists said.
The Atlanta Fed’s Growth Outlook GDPNow forecast US GDP growth contracted to an annualized 2.1% in the second quarter, suggesting the economy is moving into a technical recession after falling 1.6% in the first three months of the year.
Banks under the sights of the ECB
In China, there is an outbreak of Covid-19 in a county near Shanghai, which threatens the Jiangsu Delta region, an important region for the country’s economy. The surge puts the supply chain of solar panels, drugs and microchips at risk, and tests Beijing’s policy of zero transmission of COVID-19 through mass testing and lockdowns.
Closer to home, the European Central Bank is considering how to prevent eurozone banks from profiting too much from subsidized loans, which they have benefited heavily from during the pandemic, as it prepares to raise interest rates, it said Financial Times.
The main supporter of Cac 40, TotalEnergies rose by 3%, and the Brent barrel gained several points to $111.74.
Technip Energy grows by 2.8%. The oil services group has won a design, supply and construction contract with Hafslund Oslo Celsio for a carbon capture and storage project associated with a waste processing plant in Oslo, Norway. The amount of the contract is from 250 to 500 million euros.
Orpeia wins 3.9%. The nursing home operator has announced a major overhaul of its board of directors, with the intention of appointing former SNCF CEO Guillaume Pepy as chairman.
Elior rose in price by 1.9%. The collective food group has announced that its board of directors has decided to combine the functions of president and general manager and has unanimously decided to entrust Bernard Gault with the position of general manager.