Recession fears send Cac 40 back to four-month low, Market News

The Paris stock exchange highlighted its losses as fears of a recession outweighed hope fueled by talks between Washington and Beijing over tariff cuts. While private sector activity in China has returned to growth, it slowed markedly in the euro area in June, “increasing the risk of a recession in the region’s economy in the 3rd quarter “, said the chief economist of S&P Global, which conducts PMI research.

In addition, a strike by oil rig workers in Norway on Tuesday to demand higher wages is raising fears of an energy shock and price tensions. Investors are also looking ahead to earnings season to gauge companies’ resilience to rising costs and supply constraints.

Around 2:30 p.m Bedroom 40 fell 2.38% to 5,811.45 points from a low of 5,798.36 not seen since March 7, on business of 1.1 billion euros. Contracts future on American indices, the yield is more than 1%.

Biden is ready to lower tariffs

At the European level, the most cyclical sectors such as basic resources (-3.4%), automotive (-2.3%) and oil and gas (-1.9%) suffered the most. ArcelorMittal bulk 4.5%, Michelin 4.4%, Valeo 5.6% and TotalEnergies 3%

This week, Joe Biden may announce about $300 billion in tariffs on Chinese imports in an attempt to curb inflation, The Reuters reports. The Wall Street Journal. Chinese Premier Liu He and US Treasury Secretary Janet Yellen discussed tariffs and supply chain issues during a video conference this morning. And the dialogue was “constructive,” according to China’s Ministry of Commerce, which added that the two sides agreed to better coordinate their macroeconomic policies.

Central banks are on the move

Central bank action remains a major concern for investors as the Bank of Australia raised its key interest rate by 50 basis points for the second straight time, the highest in the institution’s history. The US Federal Reserve is due to release the minutes of its June meeting on Wednesday, while the ECB will do the same on Thursday.

According to John Velis, a strategist at BNY Mellon, the market did not take the measure of the Fed’s message. He notes that Jerome Powell has stepped up his speech, insisting that his commitment to return inflation to 2%, a process that will ” most likely very painful “.

In the bond market, yields on U.S. Treasuries are rising again after falling on Monday ahead of the national holiday. The benchmark 10-year note is trending up to 2.86%, up from 2.8803% at Friday’s close, remaining below the 3% threshold. The German benchmark of the same maturity fell to 1.2370% after jumping 11 basis points on Monday. In the foreign exchange market, the dollar is also acting as a safe haven, with the euro losing more than 1% to $1.0298 after touching a near 20-year low of 1.0281.

Rémy Cointreau upgraded, Crédit Agricole downgraded

against the trend Remy Cointreau rose 2.6%, thanks to Jefferies’ rating change from “hold” to “buy”. The broker believes that the reopening of China should be favorable for the French group amid a potential slowdown in other markets.

And vice versa, Publicis fell 5.4% as Goldman Sachs downgraded from buy to neutral.

Thales fell 5.8% on the back of a more than 12% drop at Rheinmetall in Frankfurt. According to Deutsche Bank, the results of the conglomerate specializing in weapons and automotive technology should be at the lower end of the range of forecasts announced for the second quarter.

Agricultural credit fell 3.5% as Deutsche Bank downgraded the stock from “buy” to “hold.”

JCDecaux a drop of 10.6%. Goldman Sachs lowered its target price on the title from 21 to 16 euros, maintaining its “sell” opinion.

finally, Deezer 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 position themselves in technology stocks.