CAC40: monthly decline nears -2%, E-Stoxx50 breaks 4890

(CercleFinance.com) - On this Friday of the '3 Witches', there was no sign of an upturn: the July trading session ended with a decline of -0.
7% to -0.8%, and -1.5% overall (since June 21).

Over the past week, the downturn has been heavier, at -2.5%... but the Euro-Stoxx50 (-0.7% on Friday) has done much worse, at -3.8% and almost -3% since June 21.
The trend on European markets remains deeply affected by developments in the French political situation", comments James Reilly, analyst at Capital Economics.

"While the risk of contagion has diminished, French markets are likely to remain under pressure for some time", he warns.

The Paris stock market has been weighed down this week by a number of earnings warnings, with those of Scor and Verallia in particular leaving their mark at a time when the quarterly publication season has only just begun.

The reopening of Wall Street on a downtrend won't help matters: the Dow Jones is down -0.4%, the S&P500 is down for a 3rd session (to 5.538), while the Nasdaq (+0.1%) hovered on either side of the 17,900 level (after testing 17,800 at the start of the session).

The Paris Bourse ended another difficult week in the red, marked by several profit warnings and a relapse of the luxury giants.

Market participants were not surprised by the ECB's decision to leave rates unchanged, but they did seem to appreciate the central bank's reduced concern about inflation, which opens the door to a further rate cut in September.

On Wall Street, conversation revolved around the biggest computer breakdown in history: a failure at cyber-security specialist CrowdStrike (-10%) caused a cascade of computer breakdowns affecting all services in the Microsoft universe.
All flights over the U.S. were grounded for part of the morning, as were flights to Sydney, Berlin, Spain, the U.K., etc.
The global disruption is enormous - it is unprecedented - and the cost to U.S. airlines and airports is going to be enormous.
Leading U.S. groups - such as American Express, Halliburton, SLB and Travelers - published their accounts at lunchtime... but now it's all about the 'breakdown'.

On the foreign exchange market, the euro - which had shown little reaction yesterday to the European Central Bank's maintenance of its monetary policy - fell back by -0.1% against the dollar (to 1.0890), which once again benefited from its safe-haven status in the face of risk aversion to equities.

On Friday, the single currency finished off the week's gains.

In terms of interest rates, the German Bund yield tightened by more than 5.5 basis points to 2.465%, while the yield on French OATs with the same maturity climbed by 6 basis points to 3.1240%.

In the United States, T-Bonds benefited only for a few minutes this morning from a return to risk aversion: yields quickly fell back by +5pts to 4.238%.

The day's agenda promises to be relatively poor in terms of statistics, with the only figure expected being UK retail sales.

On the stock front, the Casino retail group confirms that Casino Guichard Perrachon has been the subject of a preliminary investigation by the Parquet National Financier (PNF), following which an exchange phase with the PNF has been initiated. The investigation concerned facts likely to be qualified as price manipulation and private corruption dating back to 2018 and 2019.

Invest Securities reiterates its 'buy' opinion on Sopra Steria, 'even if the return of positive momentum is postponed to 2025', while lowering its target price from 268 to 262 euros in the wake of a revision of its estimates (-3% at BNA level).

On the occasion of the publication of preliminary half-year results, management warned of its 2024 organic growth target, while maintaining its margin target (modulo the positive impact of the SBS disposal)', notes the analyst.


Copyright (c) 2024 CercleFinance.com. All rights reserved.