CAC40: wave of declines unprecedented since March 2022

(CercleFinance.com) - The day got off to a bad start with a -6% plunge on the Tokyo Stock Exchange.
.. and it's not getting any better with 90 minutes to go before the European close.
The Paris Bourse widened its losses, with the CAC40 dropping more than 1.1% and sinking below 7,300 points, to around 7,270Pts.

According to technical analysts, the 7,275-point mark remains a key support for the time being, until the 6950/6775-point level is reached in the event of a deeper crisis.275 points remains a key support for the time being, until the 6950/6775 point level is reached in the event of a deeper crisis.

The CAC40 has fallen by -2.8% over the past week, and is now 11.7% off its May 15 record.
The index has been penalized by the downturn in the banking sector, with Crédit Agricole down 6.6%, Société Générale down 5.7% and BNP Paribas down 34%, not to mention ST-Micro down 5%.

Boosted by the fall in stock market indices since Thursday, bond markets exploded higher with the publication of US employment statistics for July, with US T-Bonds erasing -15 basis points to 3.825% (and as much as -19 basis points to 3.785%).
The slowdown in the US labor market was sharper than expected, with the US economy generating just 114.000 non-farm jobs in July, according to the Labor Department, well below market expectations, which were generally in the region of 170,000.
The unemployment rate rose by 0.2 points to 4.3%, where economists had expected it to remain stable at 4.1%, while the labor force participation rate stood at 62.7%, and average hourly earnings rose at an annual rate of just 3.6%.

In addition, non-farm payrolls for the previous two months were revised, from 218,000 to 216,000 for May and from 206,000 to 179,000 for June, giving a total revision balance of -29,000 for these two months (10th downward revision in the last 14 months).

This marked deterioration in the labor market could also raise concerns about the health of the US economy, with Fed Chairman Jerome Powell expressing concern on Wednesday about a possible "hard landing" for growth.

The big question now is whether we're talking about 'normalization' or something more: for the moment, the Fed is adopting the first hypothesis, but there's a good feeling that things could change", points out Bastien Drut, Head of Strategy and Economic Research.

Wall Street posted another session of sharp declines, with the S&P500 down 2.3% and the Nasdaq down 2.5%, with Intel down 28%, Amazon down 11.5%, Microchip down 8% and Nvidia down 6%.

This wave of risk-offs led to a flight to safe-haven assets: the Bund eased by -10% to 2.152%, while the French OAT settled for -4.5pts to 2.947%, and BTPs -3.3pts to 3.612%.
Another safe-haven asset favored on Friday was gold, with the September contract breaking through the $2,500 mark for the 1st time (the spot price reissued its record at $2,474/oz).
The dollar came under attack, falling -1.1% against the euro, which broke through the 1.0900 barrier (to 1.0915).

In French company news, AXA reports net income for the first half of 2024 up 6% to four billion euros, reflecting an increase in underlying earnings of 4% to 4.2 billion for gross written premiums and other revenues up 7% to 59.9 billion.

AXA announces that it has reached an agreement to acquire Gruppo Nobis, an Italian insurance company with gross written premiums of 0.5 billion euros and net income of 35 million euros in 2023.

Groupe BPCE's net banking income, at 5,626 million euros, is up 3%, in Q2 2024 compared with Q2 2023, and up 1% to 11,379 in H1 2024 compared with H1 2023, thanks to dynamic commercial activity across all business lines.


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