IMF downgrades, Russian gas and Walmart warning, Cac 40 sees red, Market news

After six gains in seven sessions, the Paris stock exchange stalled on a Walmart profit warning, a further cut by the IMF to a global growth forecast of 3.2% this year from 3.6% in April and the prospect of falling gas consumption in Europe. European Union energy ministers did agree to cut their consumption by 15% between August 2022 and March 2023 due to uncertainty over supplies from Russia. However, certain countries were given a concession.

Shortly before 4 p.m Bedroom 40 lost 0.50% to 6,206.23 points on a business volume of 1.22 billion euros. in New York, Dow Jones yield 0.35% and Nasdaq Composite 1.19%.

Severe recession »

Gas supply is a major concern, especially after Gazprom announced plans to cut flows to Germany via the Nord Stream 1 pipeline to 20% of capacity from Wednesday. These cuts encourage Europeans to turn to oil to meet their energy goals. Thus, a barrel of Brent from the North Sea rose by 1.8% to $106.74. TotalEnergies get 1%.

I don’t think the risk of a cut in Russian gas is factored into European stocksPaul Jackson, head of asset allocation at Invesco, said on Bloomberg TV. If supplies were to be drastically cut, that would lead to a major recession, and I don’t think that has been factored in yet “, he added.

On Wall Street, Walmart, which now expects an 11%-13% drop in annual profit, fell 8%. The world’s leading retailer said its customers are preferring to spend on food and fuel over clothing and other more lucrative discretionary spending as inflation eats away at household budgets. Amazon follows with a decrease of 4.3%.

The Fed and Gafam are in the crosshairs

At the European level, the Stoxx 600 retail trade index showed the biggest sectoral decline, down 3.6%. in Paris, Casino falls by 5% while falling to its all-time low. Crossing gives from its side 0.7%.

Investors are also looking to Washington, where the US Federal Reserve begins a two-day meeting of its monetary policy committee on Tuesday. The market generally estimates a further increase in the bond rate by 75 basis points. Federal funds tomorrow, not excluding absolutely a more aggressive step. The market estimates the probability of growth by 100 basis points to be approximately 10%.

This week also marks the publication of Gafam’s quarterly results. Alphabet and Microsoft will release their quarterly reports after the Wall Street close. Apple, Meta Platforms (Facebook) and Amazon will follow by Thursday evening. In France, 28 Cac 40 components are due to take part in the exercise from this evening (Michelin, LVMH) until Friday.

Eutelsat and Soitec were sanctioned

Dassault Systems rose in price by 1.7%. The software publisher raised its forecast for diluted net earnings per share for 2022 after a second quarter in which its results generally beat executives and analysts’ expectations.

Eutelsat a further drop of 14.5%. The satellite operator announced on Tuesday that it had signed a memorandum of understanding to merge with its UK rival OneWeb. The deal, which values ​​OneWeb at $3.4 billion (€3.3 billion), will be completed through a stock exchange.

Soitec bulk 7.1%. The semiconductor maker reaffirmed its targets for the 2022-2023 fiscal year, but experienced a marked slowdown in growth in the first quarter that ended in late June. Revenue came in at €203 million, up just 12% as reported and up 6% at constant volumes and exchange rates. Credit Suisse analysts note that annual revenue growth ” slowed down significantly to come out 14% below the consensus.

Edenred gains 3.4%. The payment vouchers specialist said it expects to achieve a record 2022 gross operating profit (Ebitda) of between €770m and €820m after its half-year results rose sharply.

Environment Veolia decreased by 3.9%. JPMorgan, which has taken the “underweight” designation, says it is pessimistic about the impact of the European energy crisis on the group.

Among other comments from analysts, Exane BNP Paribas downgraded the cement company Vicat (-5.2%) from “ahead” to “neutral”.