Closing: Paris is looking for itself

Closing: Paris is looking for itself



After a morning of volatility and indecision, the CAC40 ended the session down -0.26% at 6,362 points, penalized by the publication of less favorable than expected PMI indices. In addition, a few days before the Jackson Hole symposium, the major annual meeting of the planet’s central bankers, the prospect of an aggressive rise in interest rates has returned to the fore in the minds of investors, leading to new tensions on the bond market.

The PMI index – which provides advanced indications on the state of the private sector based on data on activity, new business, employment and prices… – shows a further contraction in the euro zone. Early results from S&P Global’s purchasing manager surveys show that economic activity in the euro zone contracted for the second month in a row in August, with the composite PMI index at 49.2 as a first estimate after 49. ,9 in July. This is the weakest figure since February 2021. Economic activity in the euro zone is affected by the impact of inflation on consumption and supply difficulties for businesses. The news is all the worse as a trend reversal is unlikely in the short term. Indeed, the first projections of this barometer of economic health “signal a contraction of the economy in the 3rd quarter of the year”, has already indicated Andrew Harker, economic director of S&P Global. Indeed, the new orders index is at 47.7 (47.6 in July), ie below the threshold of 50 used for the level of expansion. The manufacturing sector index (49.7 after 49.8 in July) is at its lowest since June 2020, reflecting a drop in industrial activity.

In the United States, economic indicators are also deteriorating. Sales of new homes for the month of July 2022 came out at a rate of 511,000 (575,000 consensus) after a revised level of 585,000 for the month of June.
The American composite PMI flash index for August 2022 came out at 45, well below the 50 mark used for growth. The FactSet consensus was at 49, while the revised index for July was 47.7. The contraction in overall activity is therefore strong. The manufacturing indicator stood at 51.3, slightly below the consensus (51.9), while the flash services indicator came out at 44.1 (49.8 market consensus and 47.3 a months earlier in revised reading). The acceleration of the decline in activity in services is the main indicator weighing down the composite index.
The Richmond Fed’s regional manufacturing index shows a contraction in activity for the month of August 2022. It was in the red at -8 (-2 by FactSet consensus and zero a month earlier).
Quite legitimately, the US market is therefore positioned in ‘risk aversion’ mode 3 days before Jerome Powell’s speech in Jackson Hole on Friday. The Chairman of the US Federal Reserve should confirm the priority of the fight against inflation, and therefore the continuation of the rise in rates. According to strategists at JP Morgan Chase, quoted by Bloomberg, the Fed is expected to make the last of its big rate hikes in September, allowing stocks to continue to rally in the second half of the year.
On Wall Street, the S&P 500 is relatively stable (+0.05% to 4,140 pts). The Dow Jones gives back -0.29% to 32,967 pts. The Nasdaq takes +0.27% to 12,414 pts.

Oil rebounds. The warning issued by Saudi Arabia on a possible reduction in production by OPEC+ in response to the drop in prices in recent weeks is boosting the price of black gold. Today, the risk of OPEC+ supply cuts outweighs the prospect of an Iranian nuclear compromise. The West Texas Intermediate (WTI) jumped 3.15% to $93.43. North Sea Brent also rose 3% to $99.58 a barrel.

After another bout of weakness in the morning, pushing the euro to a 20-year low ($0.9901), the European currency stabilized. It even manages to recover by +0.27%, but still remains below $1 at $0.9972.
The ounce of gold restores -0.13% on $1,749. Bitcoin appreciates by +1.75%, to $21,462.

Rising values

* With the rebound in the barrel of oil, oil stocks are recovering… Maurel & Prom (+7.05%), Esso (+6%). Oil services stocks are also in demand with: CGG (+6.44%), Vallourec (+6.26%) and Technip Energies (+7.05%).

* TotalEnergies (+3.24% to 54.76 euros) and its partner SSE Renewables announced the start of electricity production from the Seagreen offshore wind farm, 27 km off the coast of Angus in Scotland. The first turbine, out of a total of 114, was commissioned early Monday morning. The aim is for the 1075MW capacity wind farm to be fully operational in the first half of 2023. The $4.3 billion Seagreen project will be Scotland’s largest offshore wind farm and the deepest in the world on a fixed foundation since it is developed in 59m of water depth.
Engie is firm, with a gain of +0.12% to 12.93 euros.

* French auto stocks are stabilizing. Renault yields -0.46% to 27.88 euros while Stellantis wins +1.27% to 14.03 euros. Beyond the confirmation of JP Morgan’s buy recommendation on French manufacturers, the market expects production to return to normal. The management of Renault and Stellantis told Reuters that their French factories should restart this year with “more normal activity after the summer break”. “A normal recovery is expected,” said a spokeswoman for Renault while a spokeswoman for Stellantis explained: “Our French production sites have resumed their activity well after the summer holidays, still in a context of shortage of semiconductors involving daily management by our teams”. “Three weeks of stoppage this summer have made it possible to restock parts and all terminal sites have resumed more or less normally,” said a union source from the Franco-Italian-American group. “But we are not completely immune to disruption.”

* Valeo recovers by +1.98% to 19.09 euros. After its drop of -9% yesterday and a decline of some -16% over the last 5 sessions, the action of the automotive supplier Faurecia is still hesitating (-0.51% 14.57% in euros) despite the recommendation to ‘overweight’ from Morgan Stanley which finds the valuation of the equipment manufacturer “very cheap”. Michelin also yields -0.46% to 24.84 euros).

* After two difficult sessions, banking stocks are recovering a little. BNP Paribas (+0.31%), Societe Generale (+0.46%) and Crédit Agricole (+0.33%). Axa grabs +0.08% to 23.8 euros.

* Vergnet (+53.85% to 0.07 euros). Nice fixing for the file. By mutual agreement with Alpha Blue, the company terminates the financing contract entered into on April 28, 2022 with Global Corporate Finance Opportunities 13, an entity affiliated with the investment company Alpha Blue Ocean. This contract for the issue and subscription of warrants (BE, or BEOCEANE-BSA) of bonds convertible or exchangeable for new and/or existing shares (OCEANE) with attached stock warrants (BSA, together with the OCEANEs, the OCEANE-BSAs) related to a total maximum nominal amount of 6 million euros reserved for the benefit of Global Corporate Finance Opportunities 13. A single tranche of 2 ME was drawn.

* Dad’s Agencies (+8.7% to 3.75 euros). The company is raising its 2022 outlook after the publication of its first-half sales. Les Agences de Papa recorded income from related activities, stemming from the launch of Versity, the first metaverse dedicated to real estate, for an amount of 4.47 million euros. In addition, Les Agences de Papa France, achieved a turnover of 391 kE in the 1st half of 2022 (50 kE in the 1st half of 2021). This increase reflects the ramping up of commercial property transaction activity. The successful launch of Versity leads the company to revise its 2022 full-year guidance upwards. Les Agences de Papa confirms its intention to eventually request a transfer of the listing of its shares on Euronext Growth.

* Chargers (+0.06% to 15.71 euros). The group finalized the acquisition of The Cambridge Satchel Company (Satchel), a leading British brand in the market for high-quality leather goods at affordable prices. Based in Cambridge, the company has more than 60 employees and has state-of-the-art industrial facilities at its Leicester site, allowing it to develop a Made in Britain offer recognized for its quality.

Falling values

* Several defensive stocks are neglected on the CAC40. L’Oréal (-2.16%), Pernod Ricard (-1.96%), Carrefour (-0.99%), Air Liquide (-0.79%), EssilorLuxottica (-0.93%), Danone (-0.53%), Schneider Electric (-0.40%).

* The rebound of Sanofi (-1.78% to 81.5 euros) is cut short. Eurofins Scientific (-2.07% to 70.96 euros) is also in reli.

* Luxury stocks are down due to fears weighing on the dynamics of the global economy: Kering (-0.33% to 538.70 euros), LVMH (-0.41% to 679.80 euros), Hermès International (-1.05% to 1,363.5 euros).
Stifel, however, took advantage of the publication of a study devoted to luxury to raise its objective from 1,100 to 1,200 on the saddler while remaining ‘neutral’ on the file. LVMH remains the broker’s favorite in the sector given LV’s proven resilience in times of economic downturn, Dior’s ability to decouple from market trends and the low-beta nature of its diversified and balanced portfolio.

* Plastic Omnium (-0.27% to 18.40 euros) and Burelle (-1.96% to 500 euros) are still heckled. The automotive supplier would have won a first order for bumpers from a car manufacturer other than its historical customer (Peugeot and Citroën) for its Guichen plant in Ille-et-Vilaine.

* Capelli (-0.94% to 15.75 euros). The property developer and Novaxia Investissement, a specialist in urban property recycling, have announced the acquisition of an area of ​​5,110 square meters in Esch-sur-Alzette, Luxembourg’s second city. After deconstruction of the existing offices, the operation will allow the development of the “Terre de Sienne” program, a luxury residence of 99 apartments (spread over a set of 6 buildings. This emblematic program is estimated at a potential turnover of 70 ME. It will be carried out without soil artificialization. Construction work should begin in the first half of 2023.

* Visiomed (-0.79% to 0.375 euros). The company confirmed the success of its participatory bond issue, the amount of which subscribed via the Equisafe Invest platform reached 3.6 ME. In total, 3,640,592 bonds, with a nominal unit value of 1 euro, were issued and subscribed by 486 investors. They have a maturity of 2 years, are redeemable in fine at par and carry an annual interest rate of 10.5% payable on each anniversary. Thanks to this financing, Visiomed will continue its development strategy while respecting its commitments to use non-dilutive sources of financing.

* Voltz seeds (-1.73% to 113.5 euros). The title returned to closing despite its good orientation after the announcement of the next merger, on September 30, of its subsidiary Ball Ducrettet SAS with the parent company. This is synonymous with savings for investors, since this operation will result in a reduction in administrative management costs. “This merger will have no impact on the consolidated accounts and the group’s activity”, explains Graines Voltz.

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