(BFM Bourse) – At the end of another nerve-wracking session for investors, the barometer of the Paris market limited its decline to 0.82% this Friday, in particular thanks to the convincing annual results of the largest European capitalizations (LVMH) and worldwide (Apple), but is 1.45% behind for the week as a whole.
The caution and renewed risk aversion observed over the previous two weeks (-1.06% then -1.05%) has not been denied this week. The atmosphere even frankly turned to panic on Monday (-3.97%) when the threat of an armed conflict in Ukraine was added to the expectation surrounding the Fed meeting. Nervousness then remained in place, resulting in sudden market movements. Managed to end Thursday’s session in the green (+0.55%) despite a morning decline of more than 1.5%, the CAC 40 again recovered nearly 2% during the session on Friday, helped in this direction by the morning rebound of the New York indices, but this was not enough to make up for the heavy losses of midday (up to -2.5% shortly before 2 p.m.). The flagship index of the Paris Stock Exchange thus ended the session on a decline of 0.82% to 6,965.88 points, in a volume of transactions still fed by 5.1 billion euros. The drop reached 1.45% on a weekly basis.
Note that the CAC had not recorded such a bearish sequence since July 2021 and the appearance of the Delta variant.
Rather not reassured by the restrictive tone employed by Jerome Powell, which leads to anticipation of a determined monetary tightening, and the tensions between Ukraine and Russia, investors are no longer ready to pay the risk as generously as before. “The forthcoming withdrawal of liquidity, which has been an important basis for the increase in asset prices over the recent period, therefore affects the market segments whose valuations are the most demanding. This, in part, explains the fact that so-called “value” securities, i.e. relatively cheap, outperform so-called “growth” securities whose valuations are generally demanding”, recalls Sebastian Paris Horvitz, head of research at La Banque Postale Asset Management.
In the wake of the brilliant results of LVMH, which gained up to 5% at the start of the session, the Paris Stock Exchange had nevertheless started the day in the green. But once again the gains quickly evaporated, confirming the impressive resurgence of volatility that we have observed (in one direction or the other) for several sessions – the CAC 40 thus dropped 2.9% between the opening and 2 p.m. before recovering almost 2% in the afternoon.
Wall Street on the rebound
Impressive in Paris, the volatility is just as impressive in New York, as evidenced by the spectacular rebounds of the S&P, which managed to finish in the green on Wednesday and Thursday in the green after having lost more than 2% during these sessions. – which had not happened to it since 2008. Moreover, it does not seem to want to calm down this Friday, since after an opening down 0.7%, the S&P resumed an additional 1.3% shortly after 6 p.m. Down 8% in early trading, the Nasdaq Composite won its side more than 2% at the same time in the wake of Apple (+5.5%). The first world capitalization has in fact unveiled record quarterly and annual results, with nearly 124 billion dollars in revenue and 34.6 billion in profits … over the last three months of the year.
LVMH limits the decline of the Parisian market
The first capitalization tricolor (and largest weighting of the CAC) finally gains 3.2%, after reporting a net profit more than doubled in 2021. Outside the index, JCDecaux maintained more than 13.3% gains having pleasantly surprised by doing significantly better than expected in the last quarter of 2021. In the red at midday, several growth stocks recovered in the wake of the morning rebound of the Nasdaq (+0.9% for Teleperformance, + 0.8% for Eurofins, +0.6% for Worldline)
After its interminable plunge against a backdrop of accusations of abuse in its nursing homes, Orpea is finally bouncing back (+6%). Brutally penalized also this week, Korian resumes for its part 9%.
In the other direction, Alstom gives up 8.2% after the downgrading of the board of Exane, while a positive note from Stifel (the office went to purchase with a target of 109 euros) was not enough to save Vinci (-0.8%).
Bitcoin struggles to rebound
Renault, in verve these last three session thanks to the presentation of the electrical plan of the group and its partners of the Alliance, retrocedes 2.3%. ArcelorMittal (-5.3%), Safran (-3.8%), Danone (-2.8%) or AIrbus, Stellantis and BNP Paribas (-2.7%) also suffered.
Oil prices are moving forward again, the barrel of Brent even having the 90 dollar threshold in sight again at 6.15 p.m. (+ 1.2% to 89.3 dollars), continuing to be carried by geopolitical tensions and doubts about the ability of OPEC+ to rebuild its production at the expected pace. In December 2021, the production of the enlarged alliance increased by 253,000 barrels per day on average, far from the objective of an increase of around 400,000 barrels per day.
On the foreign exchange market, the euro rebounded timidly (+0.1% to 1.1160 dollars), while bitcoin stabilized (-0.4% to around 37,000 dollars).
Quentin Soubranne – ©2022 BFM Bourse