CAC40: Today's rebound almost wipes out weekly losses

(CercleFinance.com) - The Paris stock market rebounded by almost 1.
2% and the CAC40 climbed back above 7,500, thus avoiding a break of the 7,490 support level in a "weekly candle".
Within 0.1%, the CAC40 is back where it was last Friday, aided on this weekend eve by EssilorLuxottica (+7.5%), Hermès (+3.5%) and Dassault Systèmes and St Gobain (+4.3%).
The Euro-Stoxx50 is up +0.5% at 4,850... a little short of the 4,480Pts support level.480Pts.
On Wall Street, the week ended well with the Dow Jones up 1.3%, back above 40,000, the S&P500 up 0.9% and the Nasdaq up 0.8%: weekly losses should therefore be contained to -3% for the Nasdaq and -2% for the S&P.

This rebound won't make us forget Wednesday's "air pocket", nor the disappointing results of a number of blue-chip companies, such as STMicroelectronics, Kering, Stellantis and even 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, however, they are scarcely praised", the analyst stresses.

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

Christopher Dembik warns: "The market is clearly over-reacting to the downturn, and this is likely to continue in the days and weeks ahead.

As a sign of the prevailing nervousness, Wall Street experienced 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.

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

The Commerce Department, which publishes these figures, also reported 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 expressing 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 stood at 68.8 versus 69.6 in June, but this was not enough to move Wall Street, nor to call into question the good performance of T-Bonds, which eased -5.5 basis points to 4.203%.

It's calmer in Europe, with Bunds erasing a symbolic 1Pt to 2.4030%, the same for our OATs at 3.105% and for BTPs at 3.763% (a fine grouping).
U.S. consumer confidence deteriorated sharply in July,
The component of households' assessment of their current situation fell to 62.7, compared with 64.1 in the first estimate and 65.9 in June.

The expectations component stood 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 has risen slightly, 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 -1.5% to $81.2 (1.1% hebdo), 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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