(BFM Bourse) – The star index of the Parisian market ends a new very volatile session with a gain of 0.6% which brings it back above 7,000 points. The ACC took over more than 2% during this session, which started in sharp decline in the face of the more restrictive tone adopted on Wednesday by Jerome Powell. The positive trend was supported by the strength of US GDP growth in the 4th quarter.
Largely outlined at midday, the rebound of the CAC 40 from its morning trough (-1.55%) continued in the afternoon and the barometer of the Parisian market turned green. Supported by good economic indicators, in particular the growth in GDP in the United States in the 4th quarter (+6.9% at an annualized rate) much more pronounced than expected (consensus at +5.5%), and its defensive stocks, the The featured index resumed an additional 0.6% to 7,023.80 points on Thursday. It thus signs its 3rd consecutive increase – in a still dense trading volume of nearly 4.7 billion euros – after the wind of panic which blew on the markets on Monday (-3.97%).
Jerome Powell changes gear
Between the tensions with Russia, the continuation of the Omicron wave and the brutal return of volatility on the financial markets, Jerome Powell indeed had no shortage of reasons to adopt a relatively temperate speech during the first monetary policy meeting of the Fed of 2022. Missed: To the dismay of some investors, the president of the American central bank not only confirmed the scenario of a first rate hike as early as March, but he insisted so much on the parallel strength of the inflation and the labor market that observers concluded that he was planning at least four hikes this year, perhaps even by 0.5 percentage points if necessary (rather than 0.25 points, the not usual). For Ronan Blanc, manager-analyst at Financière Arbevel, Jerome Powell is clearly on the offensive. “After having locked himself in a transitional inflation scenario for too long”, the boss of the monetary institution “is trying to regain control, without letting himself be influenced by ambient noise (geopolitics, omicron impact, drop in equity markets )”.
The monetary adjustment cycle will be faster than in previous episodes because the underlying economic fundamentals are also more robust”, continues Ronan Blanc. And if the reduction of the balance sheet is underway, “purchases will not disappear for all that and thus prevent the yield curve from flattening too much (and leading investors to anticipate the worst-case scenario: a recession).
“The Fed is probably paying for its 2021 stubbornness on inflation. We would have liked to gain more monetary visibility, but we will have to wait a little longer for the signals of disinflation to be more apparent. It is probably a matter of weeks. In the meantime, the relay is given to companies whose publication of results should be a factor of stability for the markets”, advances the manager.
Wall Street in the green
In the aftermath of a sudden post-speech reversal by Jerome Powell, the New York indices (which had posted more than 2% gains in session on Wednesday before closing the session close to balance) are moving forward on Thursday . In addition to the sharp acceleration in activity observed between October and December, weekly jobless claims also fell after three consecutive weeks of increases. Shortly after 6 p.m., the Nasdaq advanced by 0.6%, the S&P by 1% and the Dow Jones by 1.5%. The tech index was held back by sharp declines in Tesla (-7.1%) and Intel (-5.6%) despite better-than-expected results, with the market lingering on the former’s comments regarding continued difficulties in supply, and judging the prospects of the second disappointing.
First robust burst of annual results
On this side, the harvest of the day in Paris is rather encouraging, even if the stock market reaction is not necessarily so. Within the CAC STMicroelectronics gains 2% as the Franco-Italian group, after its preliminary results, unveiled the details of its results for the fourth quarter of 2021 showing an 80% jump in profit, and reported solid prospects for the early 2022. In the same sector, Soitec is only up 0.7% after a record quarter and the confirmation of a growth target of 45% over the full year.
Highly anticipated, the ambitions of Renault and its partners Nissan and Mitsubishi in the electric are not rewarded (+0.1%). The three partners plan to invest 23 billion euros over five years with the aim of offering 35 new 100% electric vehicles by 2030. This sum comes on top of the 10 billion euros already announced by Renault and 17 billion by Nissan.
It was the defensive stocks that pulled the star index on Thursday, the best performance being for Sanofi (+3.2%) ahead of Engie (+2.3%), Carrefour (+1.8%) and Orange (+ 1.7%). On the other hand, we mainly find growth stocks, particularly technological ones (-3.2% for Dassault Systèmes, -2.3% for Worldline, -1.8% for Teleperformance).
Among the many other publications of the day, those of Voltalia (+4.1%) or U10 (+5.8%) are also welcomed, unlike those of Aubay (-0.4%) or Berkem (-1% ).
Conversely, the suspension of Elior’s annual targets led to a decline of 11.2% in the stock, even if the past quarter was not unworthy. Orpea wins an additional 9.4%, while management seems to be changing its tone by now taking “very seriously” the allegations in Victor Castanet’s book “Les gravediggers”, initially qualified as false and outrageous. Note that in the same sector but not investigated by the journalist, Le Noble Age lost almost as much as Orpea, and Korian even more (-10.6%).
The technical service provider Solutions 30, for its part, lost 3.1% after an 8.4% decline in turnover in the fourth quarter, limiting annual growth to +6.7% instead of an expected double-digit increase. initially by management.
Euro sinks to nearly 2-year low
The direction of oil prices also reversed during the day since after a still rising start to the session, the price of a barrel of Brent fell by 0.6% to 88.2 dollars around 6:15 p.m. Unsurprisingly, the Fed’s tough speech penalized the euro, which fell 0.86% to 1.1146 dollars, the lowest since May 2020
Quentin Soubranne – ©2022 BFM Bourse