This is the worst trading session since March 15, and the second-worst session of 2023 (March 13 ended with a decline of -2.9%, in the midst of the "SVB" turmoil and bank run on US regional banks).
The Paris Bourse posted a decline of over 3%, with more than 2 billion euros traded (double the average volume of the last 3 sessions at 17:00).
The CAC40 smashed several supports - notably 7,250pts, then the 7,100 of May 31 - creating a noxious situation and causing the VIX to soar by 17%, breaking through an important technical threshold: 16.50.
The VIX is breaking out of its bearish channel, risk aversion is back, and this isn't even helping bonds, as Bund and OAT yields are being stretched by +15 to +16 basis points.
There seems to be no sector to take refuge in, as even gold is down -1% towards $1,906.

Europe's stock markets are in for a real cold shower, with the Euro-Stoxx50 smashing through the 4,300 support level and now down 2.8% at 4,228.
On Wall Street, the US indices are down a uniform -1.3%, but this could widen by 10 p.m. if the technos start to correct.

Traders are said to be suddenly worried about the economy and the effects of the Federal Reserve's monetary policy.
They have so far ignored all the Fed's reminders of the need to pursue a "restrictive" monetary policy until inflation returns to around its 2% target.

According to the Fed's "minutes", the US economy - under the impact of rising interest rates - could be heading for a recession by the end of the year.

The markets are anticipating a "soft landing", hence a gain of +15% since the start of the year.

Numerous economic indicators have been published, including the eagerly-awaited ADP survey of private employment, unemployment benefit registrations and the ISM services index.

And a big surprise: private-sector hiring rose sharply last month in the United States (+497,000, 2 times more than expected), providing a further sign of the strength of the US labor market

This is a spectacular upturn after May's 278,000 job creations... already considered a 'robust' score).

According to ADP, the leisure, hospitality, transportation, education and healthcare sectors were the most dynamic.

In another surprise, growth in the US service sector rose much more than expected in June, from 50.3 to 53.9, according to the results of the Institute for Supply Management's (ISM) monthly survey of purchasing managers (the average consensus forecast was for a more limited rebound, to around 51.3).

The activity sub-index soared to 59.2, after 51.5 the previous month, while the new contracts sub-index rose to 55.5 from 52.9.
The prices paid component was one of the few to decline, to 54.1 from 56.2, while the employment sub-index improved to 53.1 from 49.2.
Published a little earlier, the competing S&P Global PMI index fell to 54.4 in June, from 54.9 in May, a level which nonetheless points to GDP growth of almost 2% in the second quarter, according to the report's authors.

Another interesting figure: the US trade deficit contracted by -7.3% to -$74.4 bn in May, due to imports shrinking at a faster pace than exports.

But the key fact is the overall decline in trade: exports of goods and services fell by 0.8% to $247.1 bn, due in particular to a drop in soybean shipments.

Imports fell by 2.3% to 316.1 billion, due to lower shipments of pharmaceuticals and industrial equipment.

Finally, the number of US jobless claims rose by 12,000 in the week to June 26, to 248,000, according to the Labor Department, compared with 236,000 the previous week (the latter figure was revised downwards from the 239,000 initially announced).

But beyond today's publications, it is above all the employment figures, expected tomorrow, which will influence the trend.

On the bond market, US government bond yields jumped +10pts to a four-month high of 4.04%.

In Europe, too, bond markets have begun a slide that is pushing yields higher, with Bunds posting +13pts to 2.6090%, and our OATs soaring +14pts to 3.1620%, retracing the worst levels of late 2022.

The dollar is stable at 1.0850 euros, as are oil prices, which are consolidating at 76.4E while awaiting the release of weekly US oil inventories in the afternoon.

In Paris, banking stocks (-5% for BNP-Paribas) and real estate (Unibal plunged -6%, in the wake of Vonovia in Germany) were particularly hard hit, as were profit-taking in luxury goods (notably Hermès -4.8%, LVMH -3.7%, L'Oréal -3.5%, Kering -3.3%).


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