(CercleFinance.com) – The Paris Stock Exchange ends the day’s session with a loss of 0.81%, at 7,143 pts, a trend shared in Europe: the Euro Stoxx yields 1%, just like Frankfurt, while London manages limit losses (-0.3%).
The same heaviness settled on the indices across the Atlantic: -0.5% for the S&P500, -1% for the Dow Jones and -0.4% for the Nasdaq…
The session turned out to be particularly loaded with economic indicators and company publications. The latest US figure of the day – the ‘UMICH’ household confidence index – is a disappointment: the morale of American households is at half mast with a fall from 70.6% to 68.8%.
The monthly survey from the University of Michigan provides other interesting indications: in detail, the sub-index relating to the assessment of current conditions fell from 74.2% in December to 73.2% in January. Moreover, the consumer expectations index fell to 65.9%, against 68.3% the previous month.
Investors were also able to take note today of retail sales statistics: they fell by -1.9% in December in the United States (against +0.2% expected), after a minimal increase of 0.2 % in November, the month of Thanksgiving and ‘Black Friday’.
According to the Department of Commerce, American households notably reduced their purchases of furniture (-5.5%), electronic products (-2.9%), clothing (-3.1%) and sporting goods and cultural (-4.3%).
Over the whole of the 2021 financial year, retail sales nevertheless rose by 19.3%, consumption in the 1st half and then in July/August having been boosted by federal checks.
Import prices fell 0.2% in December, after rising 0.7% the previous month, the US Department of Labor announced today. Over 1 year, import prices nevertheless rose by 10.4%.
The prices of imported petroleum products fell by 6.5% after two consecutive increases of +11.1% in October and +2.3% in November.
Excluding oil, import prices only rose by 0.5% in December.
For their part, export prices fell by 1.8% in December, after a gain of 0.8% in November, but rose by 14.7% over one year.
In the Eurozone, according to Eurostat, house prices, as measured by the house price index, increased by 8.8% during the third quarter of 2021, and by 9.2% in the EU by compared to the same quarter of the previous year indicates Eurostat.
This is the largest annual increase since 2005, Eurostat specifies. In the second quarter of 2021, house prices increased by 6.8% and 7.4% respectively.
Compared to the second quarter of 2021, house prices in the third quarter of 2021 increased by 3.3% in the euro area and by 3.1% in the EU.
The euro zone recorded a deficit of -1.5 billion euros in November 2021 according to Eurostat, compared to a surplus of 25 billion euros in November 2020.
In Spain, consumer prices in December recorded their fastest rate of increase since May 1992, show figures released Thursday by the National Institute of Statistics (INE).
The rise in the national inflation index (CPI) stood at 1.2% compared to November, which brings its annual increase to 6.5%.
The INE explains this increase by the 23.3% jump recorded in housing costs from one year to the next, a surge which it explains by the sharp rise in electricity prices in 2021.
Finally, in France, the consumer price index (CPI) increased by 0.2% over one month in December 2021, after +0.4% in November according to INSEE. Over one year, consumer prices increased by 2.8%, as in November.
On the interest rate market side: it was also a negative session since the T-Bonds fell by 4pts to 1.75%, the Bunds and OATs tightened by +3pts (to 0.323% and -0.057%).
JPMorgan Chase, the largest US bank by assets, reported better-than-expected quarterly earnings on Friday, but its net banking income fell short of market expectations.
The New York firm posted a net profit in the fourth quarter, down to 10.4 billion dollars, or 3.33 dollars per share, against 12.1 billion (3.79 dollars per share) a year earlier.
By way of comparison, financial analysts on average expected a profit of around three dollars per share.
The American establishment explains that the decline in its quarterly result is due to the increase in the remuneration of its employees and the increase in its investments in technologies and marketing, deemed necessary to grow its activity.
Wells Fargo (+3.3%) published results up 85%, thanks to a capital gain on sale
The financial sector is expected to post the strongest earnings growth rate on Wall Street in the 4th quarter, with expected profits up 59.7%, according to FactSet data.
According to FactSet, profits for companies in the S&P 500 index are expected to have increased by 21.7% in the last three months of 2021, their fourth consecutive quarter marked by earnings growth above 20%.
Investors are hoping that the performance of listed companies will help justify the high valuations in equity markets, which are still trading near record highs.
But analysts point out that it is not unusual for operators to remain on the reserve during the week which launches the earnings season, until they can get a clearer idea of the quality of the publications.
On the value side, EDF (-14.5%) is revising its 2022 nuclear production estimate to 300 – 330 TWh, against 330 – 360 TWh. This revision results from the extension of the outage duration of 5 reactors in EDF’s French nuclear fleet.
EDF also takes note of the measures announced yesterday by the French government and intended to limit the increase in electricity prices in 2022. The impact of these measures on EDF’s 2022 EBITDA is currently estimated at around 8.4 billion euros. based on market prices as of December 31, 2021 and approximately €7.7 billion based on market prices as of January 12, 2022.
The Elior share (-6.2%) fell sharply in Paris, following the lowering of the credit rating of the catering specialist by Moody’s agency. Financial ratings agency Moody’s said it had downgraded Elior’s credit rating to ‘B1’ from ‘Ba3’ so far, while giving it a ‘stable’ outlook.
Air France announces that its Board of Directors has approved the decision of the KLM Supervisory Board not to renew the term of CEO. by Pieter Elbers a second time. In agreement with Pieter Elbers, he will therefore not serve a third term as CEO. from KLM.
Finally, Wendel announces the successful placement, carried out today, of a bond issue of 300 million euros maturing in January 2034 with a coupon of 1.375%, the lowest coupon obtained by Wendel over a maturity of 12 years. The issue was a hit with investors and was more than 2.5 times oversubscribed.
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