(CercleFinance.com) – The Paris Stock Exchange ended the session in the red after the publication of the first results of companies in the United States and several statistics. The CAC40 index showed a decline of 0.16% towards 8,011 points at the end of the session.
Recently concerned by the awakening of American inflation, investors will have the opportunity to return to fundamentals today with the opening of the first quarter results season.
As usual, it was the major American banking groups JPMorgan Chase, Citi and Wells Fargo which kicked off at lunchtime.
Citigroup posted a net profit of $3.4 billion in the first three months of the year, compared to $4.6 billion a year earlier. Wells Fargo published net income of $4.62 billion, or $1.20 per share, an EPS down more than 2%. BlackRock, the world’s largest asset manager, announced adjusted net profit up 23% year-on-year to $1.47 billion.
These publications give the pulse of the health of the financial sector, but also provide valuable food for thought regarding the economic situation in the United States, where the latest indicators have been solid.
After the spectacular start to the year signed by the world stock markets, these results above all allow us to know whether the valuations considered high for American stocks are justified.
According to FactSet data, the results of companies listed on the S&P 500 should have increased by 3.2% on average year over year, their third consecutive quarter of growth.
But the price-earnings ratio (PER) of the S&P 500 index currently stands at 20.5x, a level well above its long-term average of 17.7x.
According to analysts, however, it will take solid results, and not just from technology giants, to push stock indices out of their current fluctuation range.
If an improvement in company accounts were to indeed materialize, stocks should benefit since this would justify an increase in prices on the basis of unchanged valuation ratios.
‘Positive announcements would encourage a recovery in stocks,’ says César Perez Ruiz, head of investments and CIO at Pictet Wealth Management.
‘An increase in all sectors would reinforce our optimism regarding American stocks,’ underlines the strategist.
But the opening of the results season will not completely forget the unknown of inflation and investors are carefully scrutinizing the price indices which were published in the morning in France and Germany.
Over one year, consumer prices in France increased by 2.3% in March 2024, after a rate of 3% in February, according to INSEE.
German inflation continued to slow down in March, thanks to a decline in food and energy prices, show official data published this Friday. The Consumer Price Index (CPI) rose at an annual rate of 2.2% last month after increasing 2.5% in February and 2.9% in January.
The indicators agenda this afternoon also included import price figures in the United States, as well as the consumer confidence index from the University of Michigan.
Import prices in the United States increased by 0.4% in March compared to the previous month (+0.1% excluding petroleum products), while export prices increased by 0.3%. (+0.4% excluding food), according to the Department of Labor.
American consumer confidence deteriorated more than expected in April, according to the first results of the monthly survey from the University of Michigan. The confidence index stood at 77.9 this month, compared with a figure of 79.4 in March, while economists expected a more limited decline, around 79.
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