Without Sanofi’s downfall, Cac 40 would have welcomed calm on the US inflation front, market news

This is the “nephew” of convenience for the markets. In July, inflation figures, revealed at 2:30 p.m. that operators had been waiting for, turned out to be lower than expected by consensus, promptly sparking a reaction to the rally in key indicators, hoping to see the Fed would be A little less aggressive about its key prices during its next session in September.

In July, consumer prices held steady over one month, less than the 0.2% rise analysts had expected. Over the course of one year, inflation came in at just 8.5%, versus the 8.7% expected and compared to 9.1% in June. The same observation is made in the “basic” data, i.e. exclusion of volatile elements such as food and energy. Prices rose 5.9%, year on year, while there were fears of a rise to 6.1%.

Image credit: Bloomberg

Sanofi slow down Cac 40

In conclusion, the Cac 40 index rose 0.52% to 6523.44 points, after being stable throughout the morning session, with a trading volume of 3 billion euros. in New York, a Dow Jones More than that, at 1.58% and Nasdaq Compositewhose “technology” and growth stock is most sensitive to rising interest rates, rose 2.35%.

If only a few French “techies” took advantage of this movement, STMicroelectronics earns 3.3%, worldline 2.9%, Dassault Systems 1.9% and capgemini 1.6%, just like a sector luxury. luxuryspecifically in the evolution of the Parisian pointer, another heavy weight of dimension, Sanofislower Cac 40. Pharmaceutical group title fell again by more than 8%, still affected by the suspension of recruitment for trials of its drug tolebrutinib in some cases of multiple sclerosis and by the deterioration of UBS analysts, which were put up for sale.

Consumer prices remained unchanged in July, and there is a good chance that prices will fall directly in Augustcomment by Paul Ashworth of Capital Economics. Gasoline prices are down 7.7% month over month, and with crude oil prices continuing to drop, they are on track to drop further 11% in August. Food prices rose 1.1% last month, extending a series of very strong increases, but this is the next deflationary pullback. »

A short respite for the Fed?

The Analysis Bureau continues: Altogether, with headline inflation still at 8.5% and core inflation at 5.9%, it’s still the unnoticed inflation dip the Fed is looking for. But it’s a start and we expect to see stronger signs of easing price pressures over the coming months. »

The reaction was also immediate on the futures markets Federal fundsAccording to the calculations of the Chicago Mercantile Exchange, which now expects only a 38.5% probability of seeing the Federal Reserve raise interest rates by 75 basis points in September, versus nearly 70% this morning. A turn of the screw is now expected by 50 basis points, with a probability of 61.5%.

Image credits: CME

The market seems reassured by the fact that we seem to have passed peak inflation and should continue to see dips in the second half.Judge Brian Price, of management firm Commonwealth Financial Network, in an interview with CNBC. The prospects for a further 75bps Fed hike appear to have diminished significantly after this report and we may only see a 50bps hike at the next meeting. If energy prices continue to fall, I expect the inflationary data to subside in the coming months. »


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