In a gas-rationed Europe, the Cac 40 lost 0.4% on the Paris Stock Exchange
The Paris Stock Exchange closes this Tuesday session under the influence of the profit warning from Walmart because of inflation, the IMF’s greater pessimism about the global economy and a Europe that needs to ration its gas consumption even more. The Cac 40 slipped 0.42% to 6,211.45 points in a market that, however, reined in initiatives and chose not to commit to a clear trend ahead of tomorrow night’s big economic meeting: the Federal Reserve’s interest rate decision.
European Union energy ministers have indeed agreed to reduce their consumption by 15% between August 2022 and March 2023 due to uncertainties surrounding supplies from Russia. However, exceptions have been granted to certain countries. An announcement made at midday, less than 24 hours after Russia announced another halving of its gas supplies to Europe, in line with threats made by Vladimir Putin back last week. As of tomorrow morning, the Nord Stream 1 gas pipeline will operate at only 20% of its capacity, compared to 40% currently.
“I don’t think the risk of a Russian gas lockdown is materially priced into European stocks.Paul Jackson, head of asset allocation at Invesco, said on Bloomberg TV. If shipments are severely curtailed it will result in a severe recession and I don’t think that’s priced in yet.”he added.
“As we mentioned last weekrecalls Jim Reid, strategist at Deutsche Bank, At 40% capacity, Germany could survive the winter even if light rationing were required. At 20%, significant rationing would likely be required unless gas exports were reduced [aux partenaires européens], which would be politically very difficult. »
Gas prices in Europe rise by more than 20% in two days. Total Energiesa player in the oil but also in the gas sector, closed slightly higher, bucking the trend.
on wall street, Walmart, which now expects its earnings to fall 11% to 13% this year, down from 9%. The world’s leading retailer said its customers are prioritizing spending on groceries and fuel over clothing and other more profitable discretionary spending as inflation eats into household budgets. Amazon loses 4%. At the European level, the Stoxx 600 retail index showed the largest sectoral decline.
On Thursday evening, Amazon will publish its results for the second quarter. Many other large companies will submit their copies this week. Alphabet and Microsoft are due to release their earnings results tonight after Wall Street closes. Meta Platforms (Facebook) and Apple will follow tomorrow and Thursday. In France, 28 members of the Cac 40 must take part in the exercise between tonight (Michelin, LVMH) and Friday.
Soitec’s release disappoints
Dassault systems up 0.8% today. The software maker raised its guidance for 2022 diluted net earnings per share after a second quarter in which its results broadly beat executives and analysts’ expectations.
Without CAC 40, Soitec fell by just over 8%. The semiconductor maker confirmed its guidance for fiscal 2022-2023, but suffered a significant slowdown in growth in the first quarter that ended in late June. Revenue reached €203 million, up just 12% as reported and 6% at constant volume and exchange rates. Credit Suisse analysts note that annual revenue growth has picked up “significantly slowed down” coming out 14% below consensus.
Eden red up 3.6%. After significantly increased half-year results for 2022, the payment voucher specialist is aiming for a record gross operating surplus (Ebitda) of between 770 and 820 million euros.