A corrective episode is confirmed, with the CAC40 dropping -2% towards 7,230 (its heaviest decline since March 15) and opening a breakout gap below 7,378pts.
The index has lost 300pts from its May 19 highs (the "3 Witches" session) and is closing in on 7,200, in volumes that are slightly higher, but far from reflecting strong selling pressure.200, in volumes that have increased slightly but are far from reflecting strong selling pressure.
The CAC40's -2% decline contrasts with Wall Street's moderate downturn (-0.5% to -0.6% for the S&P and Nasdaq).

The debt ceiling debate continues to show signs of trouble. Joe Biden and Kevin McCarthy have both expressed optimism about a final solution, but the stalemate has pushed the market lower", points out Wells Fargo.

In addition to fears about the US debt ceiling, investors were less than pleased on Tuesday with the composite PMI indices released during the session, with France's down one point to 51.4 for the current month.

No macroeconomic data is scheduled for today in France, but in the course of the morning, UK inflation figures for last month and Germany's Ifo index were released. The latter reflects a marked cooling of the business climate in Germany, dropping -1.7Pt to 91.7 points in May (from 93.4 points in April), its first decline after six consecutive monthly rises.

This development was driven by much more pessimistic expectations. However, companies were also slightly less satisfied with their current activities. The German economy is skeptical about the summer", says the research institute.

"The decline in the Ifo seems consistent with a 0.8% quarter-on-quarter contraction in German GDP, with the current conditions index also pointing to a sharp drop in production", notes Capital Economics.

The UK's consumer price index (CPI) rose by 8.7% in the 12 months to April 2023, down sharply on the 10.1% annual rate seen in March, according to the Office for National Statistics.
But the crisis continued on the British bond market, with Gilts climbing a further +15pts to 4.29%, on a par with Italian BTPs (4.285% vs. 4.32100% the previous day, when the 2 instruments were 100pts apart 1 month ago).
Such levels had not been seen since early October 2022 and the intervention of the Bank of England.
Bunds and OATs, on the other hand, eased by 4pts to 3.00% and 2.423% respectively.
In the United States, T-Bonds also eased by 2pts to 3.678%.

In other stock news, Renault and Valeo announced on Tuesday evening that they had signed a partnership agreement to develop the electrical and electronic architecture of the automaker's next-generation vehicles.

Publicis announced the acquisition of Publicis Sapient AI Labs, an artificial intelligence (AI) research and development joint venture to be launched in 2020 in partnership between Publicis Sapient, Elder Research and Tquila.

Michelin reported this morning that TBC, a U.S.-based tire distributor it operates jointly with Sumitomo, has reached an agreement to sell its retail store portfolio to Mavis Tire Express Service.

Société Générale announces the launch of its new management team, headed by CEO Slawomir Krupa and comprising two Deputy CEOs, Philippe Aymerich and Pierre Palmieri, and a newly-created Executive Committee.

TotalEnergies announces that it has acquired a 20% stake in Ductor, a Finnish start-up that has developed an innovative technology for treating organic waste with a high nitrogen content, such as poultry effluent.


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