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Cac 40 rebounds, market revises expectations for interest rate hikes

The second-quarter earnings season started with mixed results in the US. After disappointing JPMorgan and Morgan Stanley yesterday, Wells Fargo and Citigroup revealed their June 30 accounts early Friday afternoon. The first company reported a nearly half (-48%) drop in its earnings due to higher provisions for bad debts while higher interest rates slowed mortgage activity. The fourth largest bank in the United States strengthened its reserves from credit losses by allocating 580 million dollars (the same amount in euros), while it acquired more than 1.26 billion dollars in reserves during the same period last year. Earnings cut is less significant in Citigroup (-27%), which has done better than expected. Above all, the market appreciates that the institution has been able to benefit from the higher interest rates and trading activity generated by the volatility of the financial markets. The stock jumped 10% on Wall Street.

It is too early to draw any conclusions from these results, we will have to wait for the season to progress. The coming days will be intense in the United States in terms of publications. On Monday, two more banks, American bank And the Goldman Sachswill be in charge, at the same time as the computer giant IBM. It will be followed this week by Twitter, Tesla, Netflix, Johnson & Johnson, American Express and Schlumberger.

On the macro level, the operators seem to have more reason to do with the monetary policy of the US Federal Reserve (Fed). On Thursday, the scenario of raising interest rates by 100 basis points Federal funds It dominated at the end of the July 26 and 27 meeting, supported by the announcement, Wednesday, of an acceleration of inflation in June to 9.1% within one year. On Friday, stock markets lowered their forecasts and expect an increase of 75 basis points, the second in two months. This tightening is favored by Governor Christopher Waller and St. Louis Federal Reserve Bank President James Bullard.

Another element to support the market: US economic indicators are better than expected. Thus, retail sales rose 1% last month (+0.9% expected), while manufacturing activity rebounded in July in the New York area, an indicator calculated by the local branch of the local branch. feed it After posting a surprise rise to 11.1 pips vs. -2 expected -1.2 in June. Finally, the Consumer Confidence Index, as calculated by the University of Michigan, improved slightly in July, rising to 51.1 versus 50 in June and 49.9 expected unanimously.

deserted luxury

In China, Beijing’s “zero-Covid” policy had a cost: it caused GDP to fall 2.6% between the first and second quarters. However, an improvement emerged towards the end of the second quarter, with retail sales and industrial production rebounding in June, buoyed by the easing of health restrictions. It remains to be seen how long this dynamic will continue as pollution cases begin to rise again. They are at their highest level since May. This recovery, along with announcements from Burberry and Richemont regarding their sales in China, weighed heavily on the luxury cabin on the Paris Stock Exchange during the session. But thanks to the acceleration in the final stage, the titles LVMHAnd the keyring And the Hermes It ended up in the green.

On the other hand, the title total energy It rebounded 3.14%. Expect major exceptional results in refining and chemicals in the second quarter. The refining margin has more than tripled during the period, as she already indicated.

In the end, the Bedroom 40 He earns 2.04% to 6036 points which allows him to win on the brink of death Within a week… 0.05%. Trading volume increased to 3.2 billion euros. Across the Atlantic, the three major indicators are also in good shape, namely Dow Jones take 2% Nasdaq Composite 1.5%.

The car is accelerating

The largest increase in Cac 40 manufacturer Renault It rose 6.94%, while OEMs foresia And the value 5.56% and 4.5% profit respectively. BofA Securities believes concerns about the auto sector are overstated. For the author of the note, cutting off Russian gas from Europe could halt production for several quarters, but the resumption of flows would lead to a rally during the second-quarter earnings season.

finally, Dassault Aviation It rose by 3.43%. JP Morgan has grabbed the cover of the manufacturer’s title Falcon and Rafale in “Neutral” to target €162.


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