A fall of nearly 14% to the low of this session, a plunge of 20% in just three days, or more than 20 billion euros in market capitalization vanished into thin air, it had been a long time since a Cac company 40 had never experienced such a disappointment… This is all the more detrimental for the French market since it is one of the heavyweights on the rating we are talking about, Sanofi, in fifth place by capitalization.
At the origin of this veritable cataclysm, the announcement on Tuesday of the suspension of recruitment on a global scale within the framework of the trials conducted on its drug tolebrutinib in multiple sclerosis. This led the UBS research office to immediately review the file and decide to no longer be a buyer of the stock. An alert that has not gone unnoticed, investors thus seeming to remember, from the broker’s arguments, that Sanofi will soon have to face lawsuits before several American courts (including that of Illinois as of this August 22, according to Deutsche Bank), regarding claims that the gastrointestinal drug Zantac could lead to several forms of cancer or other conditions. The Food and Drug Administration (FDA, American health authorities) had requested, at the beginning of April 2020, that the drug be withdrawn from the market, stating that one of its ingredients, ranitidine hydrochloride, led, after ingestion, to the presence of an NDMA carcinogen in the body.
Tens of thousands of plaintiffs?
« At the start of the year, 3,100 people had sued Sanofi, but there could be tens of thousands if the first verdict in Illinois proves in favor of the plaintiffs. “, anticipates for its part this Thursday Oddo BHF, which judges as far as “ this figure is overestimated because the demonstration of long-term use of the drug does not seem so obvious to justify (take Zantac at least once a week for a year before the onset of cancer). »
After this real plunge on the stock market, purchases (cheaply if the risk is indeed exaggerated) enabled Sanofi to end the session with a limited decline of 3.3%. What weigh, however, on the Cac 40, which ends, him, only in small increase of 0.33%, to 6,544.67 points, in a volume of exchanges of 3.1 billion euros.
Reassuring producer prices at UNITED STATES
Impossible, under these conditions, to participate in the American party, where the major indices continue to rise (+0.7%) after a significant gain the day before, in the wake of new reassuring figures in terms of inflation. Like yesterday, when consumer prices turned out to be more lenient than analysts expected (8.5% over one year, against 8.7% expected and 9.1% the previous month), retail prices production increased by only 9.8% over one year in July across the Atlantic, below the 10.4% expected and the 11.3% in June. They are down over one month, by 0.5%, whereas a slight increase of 0.2% was targeted. Excluding volatile elements (energy and food), the rise was twice lower than expected (0.2%, against 0.4%). Over one year, producer inflation came out at 7.6%, against 7.7% expected.
For Peter Boockvar of Bleakley Financial Group, “ this statistic tells us that the inflation peak that we have been talking about for some time seems to have been reached. The whole thing is to know, now, to what extent it will continue to moderate and at what pace. »
Double date in September
At Pimco, we also remain on the alert in relation to the good consumer price figures for July. With falling energy prices, June probably marks the peak of the headline inflation rate year-over-yearnote their economists Tiffany Wilding and Allison Boxer. However, the year-over-year rate of core inflation is likely to reaccelerate in August and is unlikely to peak until September. Because the components behind the lull in July in core – airfares and hotels – tended to be more volatile, while the more ‘entrenched’ ones (rents/owners-equivalent-rent) remained firm, at 5.5% and 3.5 % respectively over one year for 2022 and 2023. »
Double rendezvous in September, therefore, for the FOMC from Fed and August consumer prices, which will be presented just before this meeting… Pimco continues to expect a 0.75 point hike in key rates next month, given the continued strength of inflation under -lying.