CAC 40: PMIs and earnings under the microscope

(CercleFinance.com) - The Paris Bourse is expected to open lower on Wednesday, with caution prevailing at the start of what promises to be a busy day of corporate results and economic indicators.


At around 8.15am, the 'future' contract on the CAC 40 index - August delivery - gave up 53.5 points at 7566 points, suggesting a continuation of the previous day's trend.

The Paris market had ended yesterday's session down 0.3% at 7598 points, penalized in particular by the sharp declines of Edenred (-13%) and Thales (-7%) following disappointing results.

Today's session will again be marked by a series of quarterly and half-yearly performances, including those of BNP Paribas, Eurofins, Forvia, Orange, Remy Cointreau and Soitec.

Last night, LVMH reported organic growth of just 1% for the second quarter, below analysts' forecasts of 3%.

Some European heavyweights such as Deutsche Bank, Equinor, Santander and UniCredit also unveiled their accounts this morning.

On the economic agenda, the results of the monthly purchasing managers' surveys (PMI) on private sector activity in the European economies should also keep investors busy.

They will be keen to reassure themselves as to the strength of growth on the Old Continent, while the PMIs of recent months have shown a slowing trend in activity and downside risks for the months ahead.

Also to be followed this afternoon is the US PMI index, which, according to consensus, should show a deceleration in growth at the start of the third quarter.

After much hesitation, a heavy-handed approach finally prevailed on Wall Street yesterday, with the three main indices ending in the red, even if the gaps remained marginal.

The S&P 500 and Dow Jones were down by more than 0.1%, the Nasdaq by 0.3%, but the Russell 2000 stood out with a gain of 1%, confirming the rotation currently taking place in favor of small caps.

Market operators were not reassured by after-hours announcements from Alphabet and Tesla, whose quarterly results proved rather disappointing.

Alphabet, Google's parent company, slightly outperformed Wall Street estimates, but the prospect of increased capital expenditure weighed on the stock in after-hours trading (-2%).

Tesla, meanwhile, lost over 3% in electronic trading following confirmation of a slowdown in second-quarter sales growth.

While corporate news was driving the stock market, bond markets remained relatively stable, with the yield on 10-year US Treasury bonds fluctuating little below 4.24%.

Bunds stand out, with a solo rise in Europe resulting in the benchmark 10-year yield easing by four basis points to 2.44%.

Crude oil prices are timidly rising again as we await this afternoon's release of weekly US oil inventories.

Brent crude is up 0.2% to $81.2 a barrel, while US light crude is up 0.3% to $77.2.

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