Cac 40: Gloomy IMF outlook for world economy stoops Paris Stock Exchange

(BFM Bourse) – The Parisian rating ended its strong streak, lowering the IMF’s forecasts of global growth eliminated any hope of closing in positive territory. Caution is the watchword of the session on the eve of the expected announcements from the US Federal Reserve on its rates, while traders note the new corporate results.

The Paris Bourse has begun to fall again, the reasons for rejoicing are the absence of subscribers. The CAC 40 gave up 0.42% to 6,211.45 points, the day after a small gain of 0.3%.

Investors continue to digest more corporate publications. In Paris, raising Dassault Systèmes’ annual ambitions was welcomed while a slowdown in Soitec’s quarterly activity was tolerated. The largest capitalization of the CAC 40, LVMH, for its part published record results in the first half … but after the closing. So it has no effect on the index yet.

On Wall Street, Walmart once again warned about its results, the American distributor got the full weight of changing household consumption habits across the Atlantic due to the increase in prices.

Consumer confidence in the United States fell again in July for the third month in a row. This deterioration in domestic economic sentiment reflects consumer fears about continued rising prices.

The Fed on Wednesday

Inflation will still be in question on Wednesday, when the US Federal Reserve raises its key rates for the fourth time this week in an attempt to prevent rising prices in the United States. It again operates in a balancing act with the difficult task of preventing the passage of prices that do not cause the country into a recession. An increase of 75 basis points (0.75 percentage point) is now expected by investors, especially since the position of Christopher Waller, one of the governors of the Fed, and the president of the Fed in St. Louis James Bullard, two prominent members of the swineherd who pleaded for an increase similar to the one operated in June.

The US Federal Reserve’s decision on Wednesday will be followed by the release of US second-quarter GDP on Thursday, with the same indicator for the euro zone due on Friday along with the first estimate of inflation for July.

For the International Monetary Fund (IMF), the economic sky is darkening and the organization thus lowered the forecast for global growth to 3.2% in 2022, against 3.6% in April. The possibility that the United States will escape the recession is small, as the chief economist of the IMF, the institution no longer counts on the growth of 2.3% this year across the Atlantic.

In Europe, where fears about Russian gas supplies are particularly felt after Gazprom’s decision to drastically cut its gas deliveries to Europe on Wednesday, citing a technical problem linked to a turbines sent to Canada for maintenance. The energy ministers of the European Union were finally able to reach an agreement to reduce their gas consumption and thus help Germany, which is heavily dependent on the blue gold of Russia.

The euro for its part yielded 0.7% to 1.015 dollars, weighed down by fears of economic recession in the Old Continent along with the prospect of reduced gas supplies.

Edenred has a ticket to the market, Soitec is struggling

On the stock side, Dassault Systèmes rose 0.8% after raising again its 2022 earnings per share target. It targets adjusted diluted earnings per share up 14% to 16%, or from 1.08 to 1.10 euros, against 1.04 euros to 1.06 euros previously.

Edenred closed up 3.5% after posting the best half in its history. The group that issued the famous Ticket Restaurant saw its results jump under the impact of inflation.

Walmart’s profit warning has chilled the entire European retail sector. Carrefour limited the damage by losing only 0.7%. Casino Guichard (-5.35%), Fnac Darty (-4.9%) and Maisons du Monde (-6.5%) were not spared by the distrust of investors towards the sector which is very sensitive to inflation.

Soitec increased its losses by 8.15%, the manufacturer of semiconductor materials that showed a sharp slowdown in its growth in the first quarter of the 2022-2023 financial year after two production incidents at the Bernin site, near Grenoble.

Eutelsat continued to decline by 18.2% on the day after falling (already!) by 17.8%. Investors are still looking for a negative view of the proposed merger of the French group OneWeb in the spatial internet.

Sabrina Sadgui – ©2022 BFM Bourse

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