(CercleFinance.com) – The Paris stock market (6,910) has reduced its losses for the morning, from -2.6% to -1.6% (after a low of the day at 6,846 pts) but still yields almost -2.2% over the past week.
Investors remain inclined to be cautious given the expectations of rate hikes in the United States and the rise in geopolitical tensions…
On Wall Street, the US indices reopened slightly lower (the S&P500 is stable, the Dow Jones yields -0.3%), the week is however likely to end at a low point, it will be the 4th consecutive decline, the Nasdaq is still dropping -3.5% weekly and -15% since January 1.
The Euro-Stoxx50 yields more than 1.7% towards 4,110 and approaches the support of 4,080 Pts, in the wake of Frankfurt with a DAX at -1.8% towards 15,240 (after 15,120 at its lowest).
Germany is very cautious on the Ukrainian file, the risks of short-term conflict remain but Berlin does not want to adopt the set of sanctions desired by Joe Biden and NATO. Tensions with Moscow will preoccupy markets until a resolution is found.
Still on the geopolitical level, Aurel BGC announces that the EU has initiated proceedings against China before the WTO, pointing to discriminatory trade practices against Lithuania.
On the macroeconomic front, the data published on Friday are generally disappointing.
The US consumer confidence index fell sharply in January, to 67.2, a level lower than the first estimate of 68.8 and down sharply from the level of 70.6 reached in December.
The component of the judgment of households concerning their current situation also fell to 72 against 74.2 in December, a deterioration which seems above all linked to the resurgence of the Covid epidemic.
The expectations component deteriorated even more markedly, to 64.1 against 68.3 last month, a decline that the UMich explains by the rise in inflation and the contraction in real wages.
In addition, household consumption expenditure (figure published at 2:30 p.m.) contracted by 0.6% in December 2021 compared to the previous month in the United States, according to the Commerce Department.
Their income, on the other hand, rose by 0.3%, in line with the consensus, knowing that record bonuses were expected in the finance sector.
On an annual basis, the rate of increase of the PCE price index increased by 0.1 point to +5.8% in total data, and by 0.2 point to +4.9% excluding energy and food .
Across the Rhine, Destatis reports a 0.7% decline in German GDP in the 4th quarter of 2021, in data adjusted for prices and seasonal and calendar variations, compared to a 1.7% increase recorded in the third quarter . On an annual basis, GDP is reduced to +1.4% against +2.9% in Q3, a drop of only -1%, towards 1.9% was expected.
In addition, French GDP growth continued in the fourth quarter (+0.7% after +3.1%, i.e. +7% at an annual rate after -8% in 2020), but at a more moderate pace than in the previous quarter, as well as that of the Spanish GDP (+2%, or 0.6 points less than in the third quarter).
Other data published this Friday morning, the economic sentiment index (ESI) fell further in January compared to the previous month, both in the EU (-1.4 points to 111.6) and in the euro zone. (-1.1 points to 112.7), but remained high overall, according to the European Commission.
Yesterday on Wall Street, the favorable trend that had marked the start of the session after encouraging economic data faded afterwards: the Dow Jones ended just below its balance, at 34,161 points, while the Nasdaq Composite s sank by 1.4%.
At current levels, the heavily tech-weighted index is still down more than 14% since the start of the year, prompting some market participants to judge that the market has become ‘oversold’.
“We believe it is now time to take advantage of the opportunity presented by this downturn to put the cash set aside to work in well-chosen sectors,” said Scott Wren, strategist at Wells Fargo.
The analyst says he particularly appreciates the technology and telecoms sectors because of their marked underperformance over the past month.
Another support factor for the markets, corporate results (sparkling for Apple and LVMH) will continue to fall this Friday, with in particular the publication of heavyweight Caterpillar and Chevron expected before the opening of New York.
In the news of French stocks, LVMH (+ 2.2%) published last night sales of 64.2 billion euros for the 2021 financial year, an increase of 44% compared to 2020. The net result of the group shows an increase of 156% in one year, to 12 billion euros.
The tumble of Orpea (+6% at 42E) and Korian (+10% at 21E) finally seems to be coming to a halt after new lows were tested in the morning at 37.25E and 19.18E respectively.
For its part, JC Decaux (+12%) unveiled adjusted revenue for 2021 of €2,744.6 million, representing organic growth of 18.5% compared to the previous financial year, driven in particular by very strong growth in the digital and a fourth quarter above expectations.
Alstom, downgraded by Exane/BNP-Paribas relapsed -8% to 27.7E.
In addition, following the favorable opinion of the European competition authorities, the multi-technical services group Spie (-1%) announces that it has finalized, on January 25, the acquisition of Worksphere, a Dutch specialist in building services smart and sustainable.
Finally, SES-imagotag reported ‘record’ sales for its fourth quarter and fiscal year 2021. In the last three months of the year, its turnover stood at 132.3 million euros, representing a growth of 34% year-on-year.
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