The Paris Bourse is staying afloat (CAC40 up 0.15% at 7,475), thanks in particular to Hermès (+4%) and Bouygues (+3.8% in the wake of TF1, which is up 10%), and the CAC40 'GR' (including dividends) is holding firm in record territory, at 22,550.550, giving it a weekly gain of +0.5% (the July 21 close had set an absolute record close, but not intraday, the previous record having been set on May 19 at 22.430).
The Euro-Stoxx50 did even better with +0.35% at 4,463, a new all-time record for a weekly gain of +1.3%.

Wall Street recovered the ground lost on Thursday evening between 8 and 10 p.m. with +0.6% on the Dow Jones, +0.9% on the S&P500, which came within 1% of its annual record, and the Nasdaq jumping +1.7% to 14.285.

The session was once again marked by a deluge of earnings releases, and it was a hecatomb for the "fragile" stocks, with crashes of -18 to -20% (CGG, Atos, Casino with a new all-time low at 2.44E).

Results from AstraZeneca, BASF, Capgemini, Engie, Eni, Hermes, Sanofi and Vinci were on the agenda this Friday, as were those from Chevron, Colgate-Palmolive, ExxonMobil and Procter & Gamble in the USA.

The session was also very busy in terms of statistics, with investors taking some reassurance from the inflation figures released in the USA at 2:30 p.m., alongside US household "income and expenditure" figures.

Consumer spending in the US rose by 0.5% in June compared with the previous month, according to the Commerce Department, slightly ahead of expectations, on the back of a 0.3% increase in income.

But the most eagerly awaited figure concerned the PCE price inflation index: it fell to an annualized 3% for June, a marked slowdown on the previous month's 3.8%.

Excluding food and energy, which are particularly volatile in terms of prices, this inflation rate closely watched by the Fed also fell month-on-month, from 4.6% in May to 4.1% last month (more than expected).
US household morale improved again in July, reaching an almost two-year high, show the final results of the University of Michigan's monthly survey.

The latest figure of the week is also very positive: the closely watched barometer of consumer confidence jumps +7.2Pts to 71.6 in its final version this month, the highest since October 2021, compared with 64.4 in June, when economists were forecasting an average index of 72.6.

Overall, this marked upturn in sentiment is largely attributable to the ongoing slowdown in inflation, as well as the stability of the labor market", said Joanne Hsu, the report's author.

Expected inflation over a one-year horizon rose to 3.4% in July, from 3.3%, but this level remains well below the 5.4% ceiling that was reached in April 2022.

In Europe, the Economic Sentiment Indicator (ESI) continued to fall in July 2023, both in the European Union as a whole (-0.5 points to 93.6) and in the eurozone alone (-0.8 points to 94.5), according to the European Commission's monthly survey.

While the decline in the ESI was more moderate than in the previous two months, the employment outlook indicator (EEI) fell more sharply, by 1.8 points in both zones, to 102.4 in the EU and 103 in the euro zone.

In France, gross domestic product (GDP) increased significantly (+0.5% in volume, after +0.1% in the previous quarter), according to a first estimate in CVS-CJO data from Insee.
According to its provisional estimate at the end of the month, consumer prices would rise by 4.3% in July 2023 over one year, marking a slight slowdown after +4.5% the previous month.

This last session of July brings no relief in the bond compartment, where a correction is taking shape against a backdrop of positive surprises regarding economic activity: the Fed has ruled out a recession scenario in the 3rd and 4th quarters of 2023.

The yield on the US 10-year bond - which had reacted little on Wednesday to the Fed's announcements - jumped +15pts on Thursday evening, approaching its annual highs and crossing the psychological threshold of 4%.
The main reason was a GDP reading of +2.4%, which showed an acceleration in US growth in the second quarter, raising fears of a continuation of the Fed's restrictive policy and triggering a rise in bond yields.

A technical rebound saw the US 10-year return to 3.97% (-4.4Pts).

The scissor effect observed on yields between the US and the EU caused a -0.5% fall in the Dollar Index, and the Euro symmetrically recovered 0.5% to $1.1033.

The trend remains negative in Europe, where Bunds and OATs tightened by +3pts to 2.455% and 3.022% respectively, while Italian BTPs added +4pts to 4.105%.

Tensions on rates have been fueled since this morning by the latest announcements from the Bank of Japan (BoJ), which decided to maintain its 0.5% target for the yield on ten-year government bonds, while allowing this level to be exceeded.

This is creating confusion on the markets, given that the BoJ will be unable to defend a fluctuation of just 0.5% in the absence of economic developments that would lead to lower yields", explains one trader.

On the stock front, Air France announced this morning sales of 7,624 ME in Q2 2023, an improvement of 0.9 MdE on last year. Net income came in at 0.6 MdE, supporting the restoration of the Group's shareholders' equity.

Engie has confirmed its targets for 2023. The Group is targeting recurring net income (group share) of between 4.7 and 5.3 billion euros this year. In the first six months of the year, Engie posted recurring net income, group share of four billion euros, compared with 3.2 billion a year earlier, an increase of +24.6% (of which +24.8% organic).

Bouygues reports net income, group share of 225 million euros for the first six months of 2023, compared with 147 million a year earlier, while its recurring operating income from ordinary activities (ROCA) rose from 513 to 727 million, representing a stable margin of 2.8%.

Hermès International has announced net income, group share (RNPG) of 2.23 billion euros for the first half of 2023, an increase of 36%, and profitability from recurring operations of 44%, compared with 42% at the end of June 2022. Half-year sales rose by 22% to 6.7 billion (+25% at constant exchange rates).

Capgemini (-6.5%) reported EPS up 20% to 4.70 euros for the first six months of 2023, with operating margin up 9% to 1.41 billion euros, or 12.4% of sales, a rate that improved by 20 basis points.
Atos fell -24% on confirmation of cash flow problems, and CGG -18% (to 0.60E) on a business warning.

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