The Paris Stock Exchange remains anchored in the red on Thursday, down markedly by around 2% now. In the middle of the afternoon, the Cac 40 lost 1.9% to 6,152.92 points, giving up a good part of its gains the day before after falling 2.7% to the lowest of the session. In question, the new fall of Wall Street in the first exchanges (-1.06% for the Dow Jones, -1.6% for the Nasdaq Composite), the American operators showing themselves hardly reassured by the latest figures concerning the evolution of prices across the Atlantic.
In New York, as elsewhere, the eyes were indeed fixed on the second statistics of the week concerning the evolution of prices in the United States, concerning those with the production this time. With the same observation as the day before, for their consumer counterpart. They have calmed down a bit from their peak in March, without completely reassuring on a rapid deceleration. Year on year, producer prices rose 11%, less than the 11.2% surge seen the previous month, but more than the 10.7% consensus target. They are up 6.9% in “core” data, ie excluding volatile elements such as energy and food, against 6.6% expected. Compared to March, the increase is 0.5% in published data and 0.6% in “core”, as expected.
Yesterday, consumer prices threw off investors. At 8.3%, inflation over one year came out, as hoped, below the 8.5% in March, a 40-year peak, but above the 8.1% expected by the consensus. Enough to prove both the optimists right – but perhaps even more so the pessimists in view of the evolution of Wall Street last night – as to the evolution of prices in the country…
“Cost of living crisis”
Core inflation of 6.2% in April means, for Allianz’s chief economic adviser, Mohamed El-Erian, that there are many factors which now come into play in the formation of price, ” it’s only a matter of time before we talk about a cost of living crisis. It’s no longer just about the war in Ukraine but about a process of large-scale inflation that the Fed has fallen behind in managing. » Delay that it will perhaps have to make up for by more aggressive rate hikes than just 50 basis point hikes in its Fed-funds at future FOMC meetings.
On the other hand, for Véronique Riches-Flores, economist of Riches-Flores Research, “ this report undoubtedly increases the chances that the peak of US inflation is behind us. (…) She notes the 18.5% surge in airfares in one month, by far the largest increase in the index, without which the monthly increase in the underlying indicator would have been 0.4%, instead of the 0.6% that the markets took a dim view of the hope of a possible easing of tensions on interest rates (…) The rise in the prices of goods or leisure services is, for example, at about half less than two or three months ago. Clothing prices fell by 0.8%. Rent increases, particularly feared after those observed on the real estate market, do not accelerate in an ostentatious way “.
STMicro as a “survivor” of the session
As for values, the luxury sector, which concentrates more than 20% of the Cac 40 weighting, weighs on the trend, Kering, Hermes and LVMH dropping 3.4% to 4.1%. Another company considered expensive on the stock market and sensitive to interest rate increases, Dassault Systems loses 3%. The cyclics Renault and ArcelorMittal give up 5.5% and 4.3%.
Veolia Environment, yet ahead of its plan in the first quarter after its merger with Suez, lost 5.4%. Some analysts believe the forecast is a little conservative.
Bouygues (-0.8%) resists better. The construction and telecommunications group unveiled billings of 8.2 billion at the end of March, up nearly 6% for an operating profit loss of 77 million, stable over one year, but less strong than feared by the analysts. The annual forecasts are maintained.
As part of its Investor Day, STMicroelectronics indicated that it is aiming for a turnover of more than 20 billion dollars for 2025-2027, with a gross margin of around 50%. Message received 5 out of 5 on the stock market, the title of the Franco-Italian semiconductor manufacturer posting the strongest of the rare increases in the Cac 40 (+ 3.1%).