It is rare enough to be underlined. The Paris Stock Exchange managed to extricate itself from an unfavorable American trend, where the falls of 12% of Amazon and nearly 6% of Intel weighed this Friday on the Nasdaq Composite, down 1.59 %. The relative stability of Apple (-0.3%) after its publication on Thursday evening allowed Wall Street to limit its decline, the apple brand being present in the three major indices.
Fairly comparable evolution for the Dow Jones, which lost nearly 1%, while the S&P 500, down 1.53%, recorded its largest monthly drop since the start of the Covid pandemic (-6%). The balance sheet is even heavier for the Nasdaq (-10%), its biggest underperformance also since March 2020.
The times have changed
For operators, times have changed. During the Covid crisis, market rallies were just as fast, analysis for CNBC Michael Shaul of Marketfield Asset Management, the current episode looks much more likely to create lasting pullbacks and there is more fear this time of a creeping bear market (…) We are moving from a long and painful correction to a more troubling situation “.
At New York, Amazon plunged 12% after announcing disappointing guidance for the current quarter. In times of high inflation, consumers reduce their spending, at a time when the group had increased its workforce and its warehousing capacities, which have now become greater than needs. The semiconductor manufacturer Intel loose 5.5%, the poor figures published raising fears of a slowdown in demand for PCs. Apple on the other hand, gained 1.5%, supported by record results despite its warning about the risk of tensions in supply chains.
Rising cost of labor
The statistics of the day were, moreover, mixed across the Atlantic, a few days before a meeting of the Fed which should lead to a rise of 50 basis points or more, in key rates, to stem the current surge of inflation. However, it was not reflected in household income and expenditure for the month of March. The component most closely followed by the central bank, the “core PCE” of personal consumption expenditure, came out up 5.2% over one year, slightly less than the 5.3% expected by the consensus. Conversely, the cost of labor increased by 1.4% in the first quarter, beyond the 1.1% expected.
In this context, the Paris Stock Exchange is doing very well, up 0.39%, to 6,533.77 points, in a trading volume of 3.89 billion euros, despite the drop of more than 2% of Saffron, the only component of the Cac 40 to be published this Friday. If the engine manufacturer has confirmed its 2022 objectives, the war in Ukraine will have an impact on the group’s business. Saint Gobain, who engaged in the same exercise last night, manages to gain 1.4% on his side. The housing specialist remained driven in the first quarter by price increases and strong demand for renovations.
The X-Fab founder is on fire
Airbus (+2.1%), Pernod Ricard (+2.1% also), and car stocks Renault (+2.7%) and Stellantis (+1.7%) offered the strongest increases to the flagship index.
Apart from the flagship index, the best performance of the day goes to X-Fab (+7.8%). The Belgian foundry, which posted a 15% growth in quarterly sales, says it is able to reach a billion dollars in turnover in 2024, two years ahead of its previous estimate. Deutsche Bank has also raised its recommendation on the title from “hold” to “buy”.
Conversely, Seb fell 4.6%. The manufacturer of small household appliances generated growth and operating profit from activities at the end of March below analysts’ expectations. The health crisis in China could also weigh on performance in the second quarter.