The consolidation phase continues in Paris, with the CAC40 dropping -0.9% to 7,244 (versus -1.3% this morning to 7,213): this represents a cumulative decline of -3% over the first 3 sessions of August (note the +20% increase in volumes to E1.5bn from E1.2bn the previous day at the same time).
The Euro-Stoxx50 lost -1% to 4,292, wiping out all its gains since July 11.
For many managers, equity markets have become overvalued after their sharp rise since the start of the year, with some even citing growing investor "complacency".

Wall Street has just reopened down from -0.4% to -0.5%, once again demonstrating its resilience.
But tensions are still running high on US T-Bonds, which are up 9 points at 4.187%, their highest level since early November 2022.
The good US figures published at 2:30 pm may be contributing to this tension: non-farm productivity in the USA rose by 3.7% at an annualized rate in the second quarter of 2023, according to a preliminary estimate from the Labor Department, a much stronger increase than economists were expecting.
This increase is based on both a 2.4% rise in production and a 1.3% reduction in the number of hours worked. Taking into account a 5.5% rise in hourly wages, non-agricultural unit labor costs rose by 1.6%.

The number of jobless claims in the USA rose by 6,000 in the week to July 24, to 227,000 according to the Labor Department, compared with 221,000 the previous week.
The four-week moving average was down by 5,500 to 228,250.
Finally, the number of people receiving regular benefits rose by 21,000 to 1,700,000 in the week to July 17, the most recent period available for this statistic.

In the Eurozone, industrial producer prices fell by 0.4% sequentially, -3.4% year-on-year and 2.4% in the EU, compared with annual variations of -1.6% in the Eurozone and -0.5% in the EU in May.
In addition, the HCOB composite PMI index of overall activity in the eurozone sank below the 50 mark unchanged, from 49.9 in June to 48.6 in July, signalling the sharpest contraction in overall activity in the zone since November 2022.

Weakness in the manufacturing sector weighed heavily on the region's overall economic performance, while growth in the activity of service providers slowed once again, posting a level close to stagnation in July.

In France this time, the HCOB PMI composite index of overall activity in France fell from 47.2 in June to 46.6 in July, signalling an acceleration of the contraction in the private sector in July.
This was the sharpest decline in overall activity since November 2020.
The decline in activity was the result of a further deterioration in demand (particularly marked in the manufacturing sector), with overall new business volume recording its biggest monthly fall in over two and a half years.
At the same time, employment growth slowed to its slowest pace of 2023, while business confidence improved from the thirty-two month low recorded in June.

On the fixed-income markets, there were no surprises and few reactions to the Bank of England's decision to add 25pts to its benchmark rate (now 5.25%).
Gilts gained +5pts in yield to 4.492%... a spread comparable to those observed elsewhere in the Eurozone, with +4.2Pts on OATs at 3.122%, +5.1Pts on Bunds at 2.558% and +8Pts on Italian BTPs at 4.272%.

With earnings season in full swing, investors will also be keeping an eye on a number of corporate quarterlies, including those of Apple and Amazon, expected this evening after Wall Street closes.

In Europe, the day will get off to a busy start with publications from, among others, adidas, AB InBev, AXA, Infineon, Merck KGaA and Société Générale (whose earnings come as a pleasant surprise, with few provisions for credit losses).

In French corporate news, Groupe BPCE last night announced a 7% decline in net banking income for the 1st half, to 11.3 billion euros, while net income, group share, came to 1.5 billion euros (-22%).

Insurance company AXA this morning reported operating income for the first half of 2022 of 4.1 billion euros (1.79 euros per share), up 5%, putting it 'on track to meet its 2023 target of exceeding 7.5 billion euros'.

For the first six months of the year, Véolia reported net income before non-recurring items (group share) of 662 million euros, up 18.7% at constant exchange rates, while EBITDA stood at 3.16 billion euros, up 8.2% on a like-for-like basis.

TotalEnergies, Baker Hughes, Technip Energies, Azimut (through the Azimut ELTIF - Infrastructure & Real Assets ESG fund) and other investors have signed a preliminary agreement to participate in a fundraising by Zhero Europe.

Finally, Crédit Agricole and Stellantis announced on Thursday that they had finalized the joint acquisition of the activities of ALD and LeasePlan in six European countries.

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