The initial surge made the Cac 40 “shhh” again, weighed down again by its heavyweight and index’s fifth capitalization, Sanofi. At midday, the leading index lost 0.28% to 6,506.24 points. The effect of the pharmaceutical laboratory still decreases by almost 12%, bringing it to 20% within three sessions.
This stock market tornado began with Tuesday’s announcement that it would halt global recruitment for its multiple sclerosis drug tolebrutinib trials. This prompted the UBS research office to review the case and decide to no longer be a buyer of the title. In particular, investors seem to recall that Sanofi will soon face lawsuits in multiple U.S. courts, including in Illinois in a few weeks over allegations that its gastrointestinal drug Zantac could cause multiple forms of cancer or other ailments .
Not enough, then, to benefit from futures contracts, well oriented again in the United States, which, according to indices, despite their strong performance the previous day (+1.6% for the Dow Jones, +2.8% for the Nasdaq). Operators remain relieved after the release of slightly softer-than-consensus inflation numbers, at 8.5% over one year and 5.9% in “core” data, giving hope that the Fed will be less aggressive on its next monetary policy in September his will meet.
Rate cuts in 2023? “Unrealistic”
” The slowdown in CPI in July is likely to come as a major relief to the Federal Reserve, especially since the Fed has long insisted inflation was temporary, which it wasn’testimated last night Nancy Davis, from Quadratic Capital Management, for CNBC. If we continue to see inflation falling, the Federal Reserve could start to slow the pace of its monetary tightening. »
Chicago Fed President Charles Evans was quick to welcome the numbers presented on Wednesday, stating that consumer price stagnation in July (+0% over a month vs +0.2% consensus expected and most notably +1.3 % in June) is the first “positive” inflation statistic since the US Federal Reserve began tightening monetary policy. However, unlike the (too) optimistic, he sees rates raising further in 2023. His Minneapolis counterpart, Neel Kashkari, who until recently was among the “most dovish,” says cutting rates next year is completely unrealistic.
Double appointment in September
We also remain vigilant at Pimco. With falling energy prices June likely marks the peak in year-on-year headline inflation, their economists Tiffany Wilding and Allison Boxer note. However, the annual rate of core inflation is likely to accelerate again in August and will not peak until September. Because the components behind the July doldrums in Vein – Airfares and hotels – tended to be more volatile while the more fixed ones (rents/owner equivalent rents) remained stable, at 5.5% and 3.5% over a year for 2022 and 2023 respectively. » So double date in September for Fed FOMC and August consumer prices to be presented just before this meeting… Pimco still expects rates to rise 0.75 point next month of underlying inflation given continued strength .
Thursday will be an opportunity to look at more price numbers, this time production. So for July they are likely to have slowed down to 10.4% over the year from 11.3% in June. At 2:30 p.m., the weekly jobless claims will also follow, which are expected to be almost stable at 265,000.