2023-08-03 06:33:27
After the downgrading of the United States’ credit rating by Fitch, the market digests the surprisingly solid data concerning private employment across the Atlantic while awaiting the monetary decision of the Bank of England, before looking at the results quarterly reports from Apple and Amazon in the evening. In France, Societe Generale, Axa and Veolia Environnement delivered their quarterly results.
In New York, the Nasdaq Composite and S&P 500 saw their worst session since February and April respectively on Wednesday, driven by profit taking, while the yield on the US 10-year bond hit a peak of 9 month at 4.1260%. The sell-off was bolstered by expectations of a series of Treasury bond issues totaling $103 billion next week, as well as news of the creation of 324,000 jobs in the sector. private last month, nearly twice as many as expected. Reflecting the return of volatility to the markets, the Vix index, or “fear index”, reached its highest since May.
25 or 50 for the Bank of England?
The worsening contraction in manufacturing activity around the world cast a chill over the markets at the start of the week. In this context, the surprise acceleration of growth in services in China is good news, but it is relegated to the background. The services sector is, by far, the one that resists the best, but an access of weakness is not excluded. To be followed, therefore, are the PMI S&P Global HCOB indices in the euro zone and its ISM equivalent in the United States.
Outside the euro zone, the Bank of England will announce its monetary decision at 1 p.m. The market expects the repo rate to rise 25 basis points to 5.25%. ” With inflation slowing more sharply than expected to 7.9% in June, one might argue that the pressure on the Bank of England to raise rates by 50 basis points has eased somewhat and especially since the Fed and the ECB both opted for 25 basis point hikes last week observes Michael Hewson, chief market analyst at CMC. However, the risk of a tightening of 50 basis points, as in June, cannot be dismissed as the BoE is more concerned by a high inflation rate than its two counterparts.
Axa, Société Générale and Veolia in the report
Beyond the numerous American statistics of the day, including weekly jobless claims, non-farm productivity in the second quarter and orders for durable goods, Apple and Amazon will be in the hot seat in the evening. Meta Platforms and Alphabet have set the bar very high, especially with regard to artificial intelligence and the “cloud”, which might be a handicap for Apple, while smartphone sales tend to slow.
Societe Generale published better-than-expected results in the second quarter, driven by its cost management and the good performance of ALD, its car rental subsidiary, which mitigated the sharp drop in its retail banking activities.
Axa unveiled results broadly in line with expectations for the first half, the increase in its income from non-life insurance having more than offset the decline in financial savings and health activities. In the first six months of 2022, the group’s net profit reached 3.83 billion euros, once morest 3.85 billion euros a year earlier. The group has also concluded an agreement with Corebridge Financial, a subsidiary of the American insurer AIG, with a view to acquiring the Irish company Laya Healthcare for an amount of 650 million euros.
Veolia Environnement published significantly improved results in the first half of 2023, driven by price increases and its savings plan, and announced that it was now aiming for organic growth in its EBITDA for the current financial year in the top of the advertised range of 5% to 7%.
Among the analysts’ notes, Stifel downgraded Elior from “hold” to “sell” and lowered its price target from 3.10 to 1.90 euros.
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