CAC40: between a fall in 'telecoms' and geopolitical tensions

(CercleFinance.com) - The Paris stock market seemed to be stuck at around -1% since this morning (around 7495/7,500 points).

The pettes are widening in the wake of Wall Street (-0.4% on average) and the CAC40 is being penalized in particular by the automotive sector (with -4.8% for Stellantis and -2.3% for Renault) followed by telecoms operators with Orange (-4%) and Bouygues (-5%).

The Wall Street opening did not help matters, with -0.6% for the Dow Jones, -0.30% for the S&P500 and the Nasdaq, despite gains for Nvidia (+4%) and AMD (+3%).

Yesterday's opposition by US President Joe Biden to possible Israeli strikes on Iranian nuclear sites was seen as a first sign of de-escalation.
But Israel's bombardment of a Russian base in Syria on Thursday morning has added fuel to the fire, raising the risk of an escalation of the conflict that Washington is trying (perhaps in vain?) to avoid.

Until this morning, investors were trying to minimize the impact of a possible future retaliation by Israel on limited targets in Iran: how can we now rule out the scenario of a generalized conflagration in the region?

'A real escalation of the conflict would have the effect of disrupting the energy supply chain. A crisis would affect the outlook for the global economy and financial markets", says Jonas Goltermann, analyst at Capital Economics.

The tensions in question are not supporting US Treasuries and gold, all of which are considered safe-haven assets.

The US 10-year is back up +4pts to 3.828%, while Bunds are back up +3.7pts to 2.138% and then +6.2pts on our OATs to 2.939% (a spread of 80pts).
As a result, Spanish bonds (+3pts) are back below our OATs at 3.927%.


On the statistics front, growth in the US private sector slowed slightly more than initially estimated in September, according to S&P Global's composite PMI index, which came in at 54, compared with a flash estimate of 54.4 and 54.6 for the previous month.

For the record, it is the 50-point threshold that separates an expansion and a contraction in a sector's activity: the higher the PMI is above this threshold, the faster the pace of expansion.

Growth was underpinned by a sustained increase in services activity, while the decline in manufacturing production became more pronounced. In addition, the survey reveals a strengthening of inflationary pressures.

The Labor Department reports an increase of 6,000, to 225,000, in new U.S. jobless claims registrations for the week ending September 23,
The four-week moving average - more representative of the underlying trend - was virtually unchanged, at 224,250
Finally, the number of people receiving regular benefits remained stable (within 1.000) at 1,826,000.

Growth slowed slightly in the UK services sector in September, according to the S&P Global survey published on Thursday.
Its PMI index came in at 52.4 in the final estimate for last month, compared with 53.7 in August.
In an information note, S&P Global highlights the healthy state of capital spending in sectors such as technology, real estate and leisure.

In the Eurozone, the HCOB PMI composite index of overall activity in the Eurozone fell to 49.6 in September from 51 in August for the first time since February.
Meanwhile, the HCOB PMI composite index of overall activity in France fell below the 50 mark unchanged in September, to 48.6 from 53.1 in August, signalling a return to contraction in the French private sector.

Oil, on the other hand, is taking account of the tensions and is up +3% to $77, with WTI climbing +3.1% to $73.1 on the NYMEX.
The dollar is up slightly by +0.3% to 1.1015/E.

In French company news, Bouygues Telecom has announced the launch on October 7 of a new B.IG brand and a new offer for families, as part of a new strategy to win new customers and build loyalty in the consumer market.

Alstom announces that it will supply Proxima with 12 Avelia Horizon very high-speed trains and provide 15 years of maintenance on the Atlantic coast lines, an order worth a total of almost 850 million euros.

Vinci Construction reports that it has won a contract to modernize and widen a 4.5 km section of Highway 1 in the Canadian province of British Columbia, as part of a consortium.

Lastly, Dutch airline KLM, a subsidiary of the Air France-KLM group, unveiled a series of measures on Thursday to improve its operational and financial performance in response to recent cost increases.


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