(BFM Bourse) – The Paris Stock Exchange ended this Tuesday session in negative territory after the president of the ECB made restrictive comments on the fight against inflation.
The Paris Stock Exchange is giving up a small part of its gains made on Monday. After having lost more than 1.1% at the start of the afternoon, the CAC 40 is containing its decline to 0.3% at 7,538.29 points. This time, the political context in France does not seem to have a real impact. The CAC 40 is actually holding up better than the other major European indices, with the DAX losing nearly 0.8% at the same time.
Central bankers have been driving the trend, as they currently gather for the annual Forum hosted by the European Central Bank in Sintra, Portugal. Pierre Veyret, technical analyst at Activtrades, points out that “market sentiment has come under pressure” following comments deemed restrictive by several members of the European Central Bank (ECB), including its president Christine Lagarde.
According to Deutsche Bank, Christine Lagarde said the ECB still faces several uncertainties in its fight against inflation, including the evolution of wages, productivity and profits. The ECB president also added that the institution would need time to gather enough data to be sure that the risks of inflation above its target have been averted.
“Since monetary policies are still considered the most important driver of the stock market, the impact of this news is not surprising,” says Pierre Veyret.
Moreover, in the eurozone, inflation did indeed slow in June, settling at 2.5% over a year against 2.6% in May. But “core” inflation, excluding food and energy prices (and alcohol and tobacco) rose by 2.9%, more than the 2.8% anticipated by economists surveyed by Reuters.
These doubts about inflation are also shared by Jerome Powell, the chairman of the American Federal Reserve (Fed), who also spoke at this forum. According to him, the Fed still needs additional data on the trajectory of prices before initiating a first rate cut.
Speaking of indicators monitored by the Fed, investors took note of the Jolts report on job openings for May. And it turned out that the number of job openings in the United States increased more than expected, to 8.14 million in May, compared to the consensus of 7.91 million job openings for the period.
The release of the statistic comes just days before the official U.S. employment report. The consensus expects nonfarm payrolls to increase by 190,000 in June, after 272,000 in May.
Michelin disappoints, as does Sodexo
On the stock front, Michelin fell 3.1% as the company held a conference call in which it said its sales volumes were lower than expected.
Sodexo fell 4.7% after reporting third-quarter comparable growth that fell slightly short of expectations and announcing the loss of a major contract.
On the contrary, Teleperformance posted the biggest increase in the CAC 40 with a 4.1% increase. The stock was driven by an upgrade in recommendation from Morgan Stanley, which moved to “overweight” from “in line weighting”. The bank emphasized that the market overestimates the threat to the company’s business posed by the rise of generative artificial intelligence.
In other markets, the euro is stable against the dollar at $1.0737. Oil is rising, as Hurricane Beryl and the conflict in the Middle East push up prices. The September contract on North Sea Brent is up 0.5% to $87.05 a barrel, while the August contract on WTI listed in New York is up 0.3% to $83.66 a barrel.
Sabrina Sadgui – ©2024 BFM Bourse
