Paris Stock Exchange – 1 (photo author: Adobe Stock / )
(CercleFinance.com) – The Paris stock exchange experienced a small air pocket around 16:30 (return to balance), while Gazprom announced further cuts in gas volumes delivered via Norstream-1: DAX, the first to worry about energy shortages , decreased to -0.8%.
But CAC has climbed back into positive territory and is showing around +0.2% (6215/6220), so Wall Street is starting cautiously after Friday’s decline (-0.9% S&P500, -1.8% Nasdaq) .
There is no expected gain before the open, as the Dow Jones gained only 0.2% and the S&P +0.1%… and it is even more disappointing for the Nasdaq, which fell -0.3 to -0.4% (loss more 2% after 48 hours).
The Euro-Stoxx50 index will try not to fall back into the red (below 3,600), followed by Amsterdam (-0.2%), which is affected by -10% Philips.
The Frankfurt Stock Exchange (-0.7% to 13,160) is also suffering from the impact of a very poor IFO index: the business climate in Germany worsened more markedly than expected in July. It came in at 88.6 this month, after 92.2 in June, when consensus expected 90.1.
A sub-index measuring “current conditions” fell to 97.7 from 99.4 in June (9,000 companies responded to the survey), while expectations were the biggest concern, falling sharply from 85.5 to 80.3, according to data from the Munich institute
“The further decline (…) comes on top of signs that the German economy is on the brink of recession, with high energy prices and concerns about energy supplies weighing on business prospects,” Capital Economics analysts said.
The CAC40 outperformed due to strong performance by banks and the automotive sector, as well as a lack of volume, with less than €1.2 billion traded in Paris in 8 hours of trading.
In fact, deserted order books allow you to draw prices at ridiculous costs.
This will soften the disappointment of the first results of “GAFAM” or the concern in the case of the “hawkish” tone of the press release of the FED on Wednesday evening.
Market participants are gearing up for a busy and potentially decisive week with a flurry of quarterly results, “statistics” (such as US GDP), punctuated by monetary policy announcements from the Federal Reserve. “It will be interesting to see how Powell tries to navigate between the need to lower inflation and support growth,” Deutsche Bank teams warned this morning.
Releases from tech heavyweights will be particularly scrutinized as investors question the strength of consumer and business demand amid the economic downturn.
Giants Microsoft and Alphabet will publish their accounts tomorrow, followed by Meta Platforms on Wednesday, followed by Apple and Amazon on Thursday.
The week will certainly be the most active of this earnings season in the United States, as a total of 175 components of the S&P 500, including 12 of the Dow Jones index, will release their numbers for the second quarter.
In France, Thursday will be a particularly tough day with results from many CAC 40 groups including Air Liquide, Capgemini, L’Oréal, Orange, Sanofi, Safran and Schneider Electric.
In fact, any surprise, one way or another, can have a big impact on the indices. Also, the week promises to be rich in terms of economic indicators.
On Thursday, stakeholders will learn the first estimate of US GDP for the second quarter, which is expected to rise 0.5% after falling 1.6% in the first quarter.
The highlight of the week: On Friday, market participants will learn the first figures for growth in the eurozone for the second quarter, as well as the latest data on inflation in the region, which could surprise growth again.
At the moment, the bond markets are looking a little worse, with OATs showing +3.5 points at 1.6450%, Bunds also posting +2.5 points at 1.0450 (the OAT/Bund spread is off +60 points vs. +30 points at beginning year). The situation improves slightly for Italian BTPs, symbolically aiming for +1 point to 3.43%, but the spread with the Bund falls below +240 points.
The euro is fairly steady, +0.4% to $1.0245, a barrel of Brent is little changed (+0.3%) at $104 in London, WTI gains +0.4% to $95.7 on the NYMEX.
In terms of shares, Faurecia (+5.5%) posted a group net loss of 296 million euros for the first half of 2022, against a profit of 146 million a year earlier, and a decline in operating margin. 2.9 points to 3.7% , but a positive net cash flow of 102 mln.
Plastic Omnium (+3%) posts H1 2022 group net profit share up 27% to €104 million, operating margin up 1.6 points to 4.6%, but free cash flow at €134 million, according to his goals.
Eutelsat Communications confirmed in a statement on Monday that it is in discussions to combine its operations with those of OneWeb to create a world leader in connectivity.
Reacting to recent market rumours, the satellite operator explains that the two companies are working on a merger project that could take the form of a share swap: this is not to the taste of investors… Eutelsat unwinds -18%.
Orange announces the signing of a firm agreement with Masmovil to combine their activities in Spain, an agreement based on an enterprise value of 18.6 billion euros, including 7.8 billion for Orange Spain.