CAC40: back above 7,500, WStreet cuts weekly losses

(CercleFinance.com) - The Paris Bourse recovers more than 1.
2% and the CAC40 recovers its 7,520 level, which will spare it a break of the 7,490 support level in a "weekly candle".
The CAC40 recovers 0.2% of last Friday's price, well helped on this weekend eve by EssilorLuxottica (+7.5%), Hermès (+3.5%) and Dassault Systèmes and St Gobain (+4.3%).
The Euro-Stoxx50 grabs +0.8% towards 4,865... it needs little more to regain support at 4,480Pts.
On Wall Street, the week ends well with the Dow Jones up +1.6%, back above the 40.500, while the S&P500 recovered +1%.
The Nasdaq had a harder time of it, clawing back +0.5%: weekly losses should therefore be contained to -3% for the Nasdaq and -1% for the S&P.

This rebound won't make us forget Wednesday's "air pocket", nor the disappointing results of several major companies, such as STMicroelectronics, Kering, Stellantis and Capgemini today.

When results fall short of expectations, companies are heavily punished", points out Christopher Dembik, Investment Strategy Advisor at Pictet AM.

When results are better than expected, on the other hand, they are scarcely applauded", the analyst points out.

The US equity markets have also seen significant sell-offs this week, as investors continued to dump major technology stocks following the less than reassuring releases from Alphabet and Tesla.

"There is clearly a downward over-reaction in the market, which is likely to persist over the coming days and weeks", warns Christopher Dembik.

As a sign of the prevailing nervousness, Wall Street had another volatile session yesterday, which fuelled further profit-taking on the 'tech' giants, with the Nasdaq ending down almost 1%, with a stock like Dexcom disintegrating by -35% on Thursday evening, then by a further -10% towards $64, i.e. -42% over the past week.

The market certainly needed to take a break and return to more attractive valuation levels, which we hope will enable a return to the upside in the autumn", explains Christopher Dembik.

In terms of figures, the much-anticipated PCE price index - closely watched by the Fed - reflects a 0.1 point drop in inflation to 2.5% year-on-year, but the 'Core' PCE is stable at 2.6% (excluding energy and food).

The Commerce Department, which publishes these figures, also reports that US household spending rose by 0.3% in June compared with the previous month, while incomes rose by 0.2%.

Consumer sentiment edged up from 66 to 66.4, while the component of households' assessment of their current situation fell to 62.7 from 64.1 in the first estimate and 65.9 in June.
The expectations component came in at 68.8 vs. 69.6 in June, not enough to move Wall Street, nor to call into question the good performance of T-Bonds, which eased by -5.5 basis points to 4.203%.

It's calmer in Europe, with Bunds erasing a symbolic 1 basis point to 2.4040%, the same for our OATs at 3.105% and BTPs at 3.765% (a fine grouping).

Several figures were published between 2:30 and 4:00 pm in the United States: US consumer confidence deteriorated sharply in July,
. The assessment component of households questioned about their current situation fell to 62.7, compared with 64.1 in the first estimate and 65.9 in June.

The expectations component came in at 68.8, compared with 69.6 in June and a first estimate of 67.2.

One-year consumer inflation expectations came back to 2.9%, back in the 2.3% to 3% range that prevailed before the arrival of the Covid-19 epidemic.

The oil market is back on a slight upward trend, but is heading for a third consecutive week of declines in the face of the sudden surge in global risk aversion.

Brent crude resumes its slide, dropping -2.1% to $80.7 (-2% weekly), while the euro is stable against the greenback at $1.084/E.

In other French company news, EssilorLuxottica reported adjusted net income (group share) of 1.75 billion euros for the first six months of 2024, up 5.5% (+10.6% at constant exchange rates), and an adjusted operating margin of 18.3% (+0.5 points to 18.8% at constant exchange rates).

Capgemini reported a 3% increase in net income to 835 million euros, with a stable operating margin of 12.4% on sales down 2.5% to just over 11.1 billion euros.

Amundi reported a 9.4% increase in adjusted net income to 350 million euros for the second quarter of 2024, thanks to growth in adjusted net income (+7.7% to 887 million) and a positive scissors effect.

Bouygues reported net income, group share, down 17% to €186 million for the first six months of 2024, but operating profit from ordinary activities (ROCA) up 3% to €747 million, an increase 'largely driven by Equans'.

Lastly, Air Liquide reported a 3.3% increase in recurring net income, Group share (RNRPG) to 1.68 billion euros (+16% excluding the currency effect) for the first half of 2024, with an operating margin of 19.4% (+100 basis points excluding the energy effect).

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