Paris Stock Exchange: Invulnerable, oil?

Paris Stock Exchange: Invulnerable, oil?

Finally, the decline recorded in Friday’s session prevented US indices from continuing the second week of recovery. Wall Street lost about 1% of the 6.5% recorded in the last week of May. Almost the same observation in Europe, where we lost a little less land. But just before that we also took a little less. After 22 weeks in 2022, the MSCI World Index lost 13%. The American Nasdaq 100 remains the ugly duckling with a drop of 23%, the most durable (at the cost of a sharp depreciation of the yen) is the Japanese Nikkei 225 with a drop of less than 4%. So much for a very short balance sheet.

Little background music remains unchanged: investors are looking for low points in an economic environment that is much more complex than anything in recent years. I say economic, but I should say economic and geopolitical, because the two have always been closely linked. However, sometimes we tend to forget the importance of this connection and history reminds us of it. To illustrate, I will give a few examples from the weekend.

First, the White House has confirmed the word about lifting some tariffs on China to ease inflation. Biden would therefore be ready to reverse these flagship measures of the Trump era. I believe that there are other problems behind this appeal, otherwise the United States would simply implicitly acknowledge that economic stabilization depends on Chinese production. I do not know what part of the current inflation is the customs barriers of the time, but I do not think that it is negligible, even though it is only one piece of the puzzle.

Another example of current geopolitical turmoil in the economy, Washington would allow Chevron, ENI and Repsol to export Venezuelan oil to Europe as a substitute for the expulsion of Russian oil. A decision that would certainly not have happened, at least not at the time if Vladimir Putin had not invaded Ukraine. In the same vein, energy chaos could help Iran regain its place on the world stage, even as the United States opposes the current unrest into ongoing negotiations with Tehran.

It is also geopolitics that allows Saudi Arabia to increase the price of oil sales in July, as it announced this weekend. The barrel rose to $ 120. No wonder in this little game, the only sector that is really doing well in the stock market in 2022 is oil. The following graph illustrates this.

oil rules

Exchange rate of various sectors of the stock market from January 1

Here is some information that you should not miss at the beginning of the week:

  • Russia has hit Kyiv, while the situation in the Donbas remains confused. Vladimir Putin has threatened the West with reprisals if he provides Ukraine with new long-range equipment.
  • We are not here in geopolitics, but only to show that the unbearable ease of being can have consequences: Conservative dissidents want to head the head of their own camp, Boris Johnson, whose escapades at the time of the prison are ulcers and in their own party. According to the Sunday Times, a no-confidence vote is scheduled for Wednesday.
  • Another deadly shooting took place in the United States.
  • This day in France is a half-holiday, administrative charm that only France and a few rare countries can handle. However, the Paris Stock Exchange is open. Public holidays also in Switzerland (where the stock exchange is closed) and in Germany (where the stock exchange is open).

In the economic calendar, all eyes will be on the May data on consumer prices and the US five-year inflation forecast, which will be published on Friday. The World Bank (Tuesday) and the OECD (Wednesday) will publish their updated economic outlook in the meantime. Christine Lagarde will enter the arena at the June meeting of the ECB on Thursday. The central bank is likely to signal the end of its asset purchase program and specify the timing of the rate hike. The first turn of the screw is most likely in July.

European leading indicators are rising this morning due to Asia. The Shanghai Stock Exchange is a pioneer in taking advantage of the country’s deprivation of liberty measures. CAC40 returned 0.89% to 6543 points at the opening.

Economic highlights of the day

There will be no key indicator today. All macro agenda here. This morning, China announced an improving Caixin PMI between April and May, but still in a sharp drop to 41.4 points.

euro is trading at 1.0722 USD. Ounces of gold trades around 1855 USD. The oil remains high Brent from the North Sea to $ 120.54 per barrel and US light crude WTI for $ 119.71. Performance US debt after 10 years, it is slightly gaining ground at 2.94%. and bitcoin takes 4% to $ 31,500.

Major changes in recommendations

  • Airbus: Jefferies stays for a long time with the target price reduced from 150 to 145 EUR.
  • Aveva : Citigroup is moving from neutral to sales and is focusing on 2000 GBp.
  • BAE systems : Jefferies stays with target price increased from 875 to 890 GBp for a long time.
  • BNP Paribas : AlphaValue is moving from a reduction to a purchase and aims at € 76.40.
  • French electricity : HSBC is moving from maintenance to downsizing and is targeting € 7.40.
  • Eurazeo : AlphaValue moves from purchase to accumulation targeting € 87.30.
  • Investor AB : AlphaValue remains to be reduced with target price reduced from 193.20 to 180 SEK.
  • Johnson Matthey : HSBC is moving from purchase to retention and is aiming for 2350 GBp.
  • Aero engines MTU : Jefferies stays for a long time with the target price increased from 235 to 240 EUR.
  • Saffron : Jefferies remains with target price reduced from 97 to 95 EUR.
  • General Societies : Jefferies will move from suspension to purchase with a target of 35 euros.
  • Reunited techniques : Barclays is moving from overweight to weighted online, focusing on € 12.
  • Thales : Jefferies remains with target price increased from 143 to 145 EUR.
  • Vallourec : Barclays is moving from underweight to weighted online and is aiming for € 17.

In France

Important (even less important) announcements

  • Saint Gobain and BioMerieux separate dividends. Liquid air separate your annual free share.
  • Telecom Italiawhose Vivendi is the largest shareholder, it announced that it will continue with the planned division.
  • Technicolor adjusts the TCS forecasts that should be disaggregated due to currency effects. At the same time, discussions on refinancing continue.
  • Wendel is completing the sale of Cromology.
  • Company shareholders Pierre and the holidays will vote on restructuring on 8 July.
  • Bilendi will settle in the Netherlands.
  • Neocom proposes sales-extinction to its shareholders.
  • Nanobiotix publishes favorable data on its compound NBTRX3 in combination in the treatment of head and neck cancer and other solid tumors.
  • Visiomed will issue EUR 1.8 million in shares to pay for part of the Smart Salem acquisition.
  • Transgene lists phase I data on TG4050.
  • Dad’s agencies postpone the publication of their financial report for 2021 again.

In the world

Important (even less important) announcements

Reading


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