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AOF France/Europe closing analysis – Equities and the euro in turmoil

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(AOF) – European equity markets closed sharply lower. Investors fear a very aggressive response from the Fed to counter inflation at its highest in 41 years in the United States. In this regard, the euro has fallen below the dollar threshold. Moreover, the European Commission has just reduced its growth forecasts and increased those for inflation. Finally, the euro zone is weakened by the Italian political crisis. On the business side, the results of JPMorgan and Morgan Stanley were disappointing. The CAC 40 lost 1.4% to 5,914.93 points and the Euro Stoxx 50, 1.63% to 3,397.56 points.

Swatch Group fell 0.09% to 233.5 Swiss francs despite solid half-year results and the confirmation of its annual forecasts. Like the rest of the luxury sector, the manufacturer of Omega, Tissot and Longines watches is resisting the war in Ukraine and the drop in demand in China linked to the pandemic. Over the six-month period to the end of June, the Swiss giant made a net profit of 320 million Swiss francs, up 18.5%. The AWP consensus was counting on 334 million.

TFF Group, formerly Tonnelleries François Frères, gained 3.12% to 33.1 euros, supported by robust annual results and encouraging forecasts. The maker of barrels for wine, whiskey and bourbon raised its dividend by 14% to 0.4 euros per title. During its 2021/2022 fiscal year ending April 30. the net income of the family group jumped 78% to 36.6 million euros thanks in particular to the contribution of a significant exchange rate effect. Current operating profit increased by 4.1% to 38.3 million, representing a margin of 12.7% against 14.1% a year earlier.

The macroeconomic figures of the day

Producer prices in the United States climbed 1.1% over one month in June. Economists were counting on +0.8% after +0.9% in May (revised from +0.8%). Over one year, they jumped by 11.3% against a consensus of +10.7% after +10.9% in May (revised from +10.8%). Core prices rose in June over one month by 0.4%. Economists were aiming for +0.5% after +0.6% in May (revised from +0.5%). Over one year, these “core” prices rose by 8.2% against a consensus of +8.1% after +8.5% in May (revised from +8.3%).

In the United States, 244,000 new weekly jobless claims were recorded. Economists were counting on 235,000, like the previous week.

Around 5:45 p.m., the euro lost 0.2% to 1.0039 dollars.

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