CAC40: falls back towards 6.620, banking and auto sector plunge – 04/05/2022 at 15:39

( – The Paris Stock Exchange is accelerating its decline (-1.7%) towards 6,618 points, weighed down by the auto and banking sector (-5% on average) after new sanctions against Russian banks, banned from operate in Europe (particularly VTB): this rupture will be costly for the entire sector, the ‘counterparty risks’ are exacerbated.

The US Treasury also prohibits Moscow and Russian companies from honoring their debts in dollars, which amounts to imposing a situation of artificial ‘default’ on them.

The Paris stock market is largely the red lantern in Europe because the Euro-Stoxx50 yields only barely -1%, Frankfurt -0.7%, and London is even up 0.1%.

Wall Street reopens on an almost stable note (+ or -0.1% near), the Nasdaq yields -0.3%.

Are the markets also beginning to take full measure of the consequences (massive shortages of spare parts, materials) of the news from China, where more and more large cities are affected by restrictive measures to stem the spread of the Omicron variant.

“The economic costs of the zero Covid strategy are increasingly high and are likely to exacerbate material and supply bottlenecks in Germany as well”, warns Commerzbank.

In terms of statistics, the session was dominated by the publication of the various composite PMI indices from S&P Global, not to mention French industrial production (down slightly).

In the United States, the trade balance deficit stood at $89.2 billion in February. Economists had forecast a deficit of $88.5 billion after 89.2

in January (revised from 89.7 billion).

We are now awaiting the publication of the services ISM in the United States.

According to INSEE, production in France in February fell back in manufacturing industry (−0.5% after +2.2%) as in industry as a whole (−0.9% after + 1.8%).

Having recovered from 55.5 in February to 56.3 (number slightly revised from a flash estimate of 56.2), the S&P Global Composite PMI of overall activity signals an acceleration in the rise of the French private sector activity in March.

On the interest rate market side, the tension is palpable with +10.1pts at 1.1120% on our OATs, Bunds post +6pts at 0.5800%, Italian BTPs +13pts at 2.208%.

In the news of the values, Sté Générale unscrews of -6.5%, Crédit Agricole of -5.9%, BNP-Paribas of -4.5%.

Car manufacturers are again attacked with Renault -5.5%, Faurecia -6%.

Casino indicates that it has sold the balance of its stake in the property company Mercialys, ie 10.3% of the capital, an operation generating proceeds of 86 million euros for the food distributor.

Icade announces that on 1 April it finalized the sale of the Le Millénaire 4 building in the Parc du Millénaire (Paris 19th) for 186 million euros, thus bringing the disposals carried out in the Parc du Millénaire to almost 740 million.

Thales Alenia Space, a joint venture of Thales (67%) and Leonardo (33%), announces a collaboration with Microsoft to explore the development of new capabilities in space computing and geospatial observation tools.

UBS reaffirms its ‘buy’ recommendation on Alstom with a price target lowered from 47 to 44 euros, a new target still leaving a potential for growth of 109% for the title of the transport equipment manufacturer.

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