(CercleFinance.com) – After having stagnated around 6,500 pts for a good part of the day, the Paris stock exchange ended the day’s session with a decline of 1.84%, to 6,378 pts, however doing better than the other European indices , the E-Stoxx50 lost 2.07%, London fell 2.58% and Frankfurt lost 2.18%.
While hopes for negotiations were still possible this morning between Ukrainians and Russians, Emmanuel Macron was able to speak for almost an hour and a half by telephone with Vladimir Putin and expressed the determination of his Russian counterpart, fearing that ‘the worse’ is to come. After eight days of conflict, negotiations are still ongoing between emissaries from both sides, meeting at the Ukrainian-Belarusian border.
Across the Atlantic, the American indices are also at half mast, the Dow Jones yielding 0.3%, ahead of the S&P500 (-0.5%) and the Nasdaq (-1%). After opening slightly higher, they reversed around 4 p.m., shortly after the release of a disappointing services ISM in the United States
This is indeed lower than expected with a decline to 56.5 in February, against 59.9 in January, while economists expected an increase to 61.
The new orders component notably fell to 56.1 from 61.7 in January, but the most worrying decline is to be attributed to the employment sub-index, which fell from 52.3 to 48. .5, to now settle below the 50-point threshold, ie in the contraction zone.
In its survey, the ISM notes that beyond labor shortages, companies surveyed say they are struggling to meet demand due to supply and logistical challenges, from items to origin of this slowdown in growth in the sector.
Non-agricultural productivity, on the other hand, rebounded by 6.6% in the United States in the fourth quarter of 2021 at an annualized rate, according to the Labor Department, which therefore confirms in second reading its preliminary estimate from a month ago.
This rebound, in line with the consensus, reflects a 9.1% growth in production for an increase of only 2.4% in the number of hours worked. Furthermore, unit labor costs increased by only 0.9% due to a 7.5% jump in hourly wages.
The number of weekly registrations for unemployment benefits fell the week of February 21 in the United States, settling at 215,000, against 233,000 (revised figure) a week earlier: this is a new historic low.
On this side of the Atlantic, the rise in producer prices in the euro zone once again accelerated in January due to a new surge in energy prices (+30.6% on an annual basis, in the wake of an 85.6% surge in energy costs).
Producer prices in the 19 countries that share the euro rose by 5.2% over one month, after +3% in December and +1.8% in November, according to data published Thursday by Eurostat.
Excluding energy, core inflation only increased by 2.2% in eurozone industry as a whole in January…but this is a detriment to the margins of manufacturing companies .
The IHS Markit composite index of overall activity in France fell from 52.7 in January to 55.5 in February, after the slowdown caused the previous month by an upsurge in Covid-19 cases.
While the increase in activity of service providers was slightly more marked than that of production among manufacturers, growth nevertheless showed a sustained pace in each of the two sectors covered by the survey.
“Significant downside risks continue to threaten growth, however, including inflation, which is clearly on the rise,” warns Joe Hayes, senior economist at IHS Markit.
In the euro zone, the final ‘composite’ index of overall activity in the region’s private sector reached 55.5 in February against 52.3 in January, but this recovery was accompanied by a record rise in invoice prices, show the final results of the IHS Markit survey of purchasing managers.
On the currency side, the Euro remains under pressure and fell -0.6% to $1.1048; on the bond market, the inflation variable seems to weigh heavily since the Bunds and OATs are trending up by +5pts to 0.523% and 0.06% respectively, the US T-Bonds resist better with +1pt to 1.8720%.
In the news of French companies, Thales (+3.8%) announces its intention to propose a dividend increased by 45% to 2.56 euros, on the occasion of the publication for 2021 of a net result adjusted group share up 45% to 1.36 billion euros and EBIT up 32.1% to 1.65 billion.
TotalEnergies announces its $50 million participation in the Tropical Asia Forest Fund 2 (TAFF2) managed by New Forests, whose objective is to invest in certified plantation and primary forest conservation projects in Asia from the South East.
Boosted by its quarterly reports, Technip Energie, which lost 40% in 1 month (falling from 14.8 to 8.8E), recovered by +13.6% and returned to the 10E mark.
Finally, Societe Generale (-0.7%) highlighted this Thursday a “limited” exposure to Russia and said it was able to absorb the consequences of a possible “extreme” scenario which would impact its assets. in the country. In a press release published this morning, the French establishment estimates its exposure to the Russian market at 1.7% of the group’s total exposure, i.e. 18.6 billion euros at the end of 2021, of which 15.4 billion recognized in its subsidiary. Rosbank.
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