(BFM Bourse) – The Paris Stock Exchange knows how to welcome good news. Drifting until 2:30 pm, the CAC 40 immediately jumped to 6,500 points in reaction to lower-than-feared inflation figures in the US in July.
Staggering into early afternoon, the Paris Stock Exchange accelerated higher following the announcement of slowing US inflation in July. The CAC 40 has almost erased its losses from the previous day (-0.53%), thanks to a gain of 0.52% to close at 6,523.44 points after a daily high of 6,545.64 points (+0, 84%). The rebound in the Parisian index would have been more powerful if Sanofi had not returned more than 8.2%, still struggling after the cessation of recruitment for trials of its drug against multiple sclerosis.
Convinced that peak inflation has passed, markets now expect the Fed to be tempted to ease its stance on its benchmark rates at its policy meeting scheduled for September.
On Wall Street, the wait-and-see attitude gave way to euphoria, with major indexes bouncing in unison the day after a rocky session following warnings about rapid succession sales by semiconductor makers. At the close of European stock markets, the Dow Jones gained 1.70%, the S&P 500 rose 1.9% and the Nasdaq -more sensitive to the direction of interest rates- rose 2.5%.
Inflation slowed more than expected in July in the US as lower pump prices moderated overall price growth. Against all odds, consumer prices remained stable between June and July, where the consensus was betting on a rise of 0.2% in one month. On an annual basis, inflation slowed to 8.5% versus an 8.7% price rise expected by markets. Joe Biden on Wednesday hailed “signs that inflation may be starting to moderate” after a 40-year high of 9.1% last June. “Today we learned that our economy had 0% inflation in July,” even Joe Biden rejoiced.
Adjusted for food and energy prices, the core price index rose 0.3% last month and year-over-year, it rose 5.9% as investors feared a boost to 6.1 in June. %.
As soon as the statistics were released, the probability of a further 0.75 percentage point rate hike by the Fed in September fell to 34% from almost 70% on Tuesday. The market is now betting on a rise of half a percentage point after the next Fed meeting scheduled for September. The greenback lost ground, the European currency was trading at 1.0341 dollar (+1.24%).
On the business side, news is still scant. Eutelsat gained 3.9% as shipping company CMA CGM declared on August 5 that it exceeded the threshold of 5% of Eutelsat’s capital and voting rights, and owned 5.03% of the French satellite operator.
But the prize for the biggest rise of the day goes to Alstom (+6.1%), followed by Atos (+5.1%) and SMCP (4.8%).
EDF closed slightly down 0.2%, the energy company today filed a legal action before the Council of State, and a claim for compensation, for an amount estimated to date at 8,340 million euros, before the State.
At the bottom of the CAC, Sanofi (-8.2%) continues to be penalized by the suspension of worldwide recruitment for trials carried out with its drug tolebrutinib in multiple sclerosis.
Poujoulat closed the session with balance, the group based in Deux-Sèvres recorded a growth of 34% in the first quarter of its 2022-2023 financial year, thanks to the appetite of consumers for wood energy equipment and the renewal of the market
Oil prices maintain a downward trend, weighed down by a possible return of Iranian crude to the market with the negotiation of the nuclear agreement and the announcement of an increase in US stocks last week. North Sea Brent crude fell 1% to $95.58 while WTI lost 0.9% to $89.85.
Sabrina Sadgui – ©2022 BFM Bourse
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