(Boursier.com) — THE TREND
The CAC40 recovered 3.68% to 6,588 points on Wednesday, in a market that is still just as volatile and which is tracking crude oil prices, which have fallen back below $100 a barrel of Brent. Certain sectors highly exposed to Russia are thus showing strong rebounds, in particular the automotive and banking sectors. The bullish wave originated in Asia this morning, as Chinese equities sharply increased after the Deputy Prime Minister’s announcements of forthcoming capital market-friendly policy measures. The Shanghai composite index gained 3.48% and Hong Kong even soared by 8.87%!
In Europe, Ukrainian President Volodimir Zelensky said that negotiations with the Russians seemed “more realistic” but that more time would be needed for a decision to be taken… Ukraine and Russia would have made significant progress in view of a 15-point interim peace plan including a ceasefire and a Russian withdrawal, if kyiv declares neutrality and accepts the limits of its armed forces, according to three people involved in the talks quoted by the ‘Financial Times’ . Under such a deal, kyiv would give up its ambitions of NATO integration in exchange for security guarantees from Western powers. The potential deal was reportedly discussed in full for the first time on Monday by Ukrainian and Russian negotiators. Among the concessions, Ukraine would accept not to host foreign military bases and would renounce NATO, in exchange for the protection of allies such as the United States or the United Kingdom. The nature of Western guarantees for Ukrainian security and their acceptability by Moscow remains to be defined and could constitute an obstacle, as does the status of the Ukrainian territories seized by Russia and its proxies in 2014.
Moscow and Kyiv may have said on Wednesday that they had made progress on the terms of an agreement, but Ukrainian officials remain skeptical of Vladimir Putin’s full commitment to peace, and worry that the Kremlin may just be seeking to to buy time to regroup his forces and resume his offensive with a vengeance… A senior adviser to Zelensky, Mykhailo Podolyak, told the FT that any agreement would involve a withdrawal of Russian troops from Ukrainian territory conquered since the invasion which began February 24.
ECO AND CURRENCIES
The Fed will take center stage on Wall Street today, and is expected to announce a (small) rate hike in the face of heavy inflation after its monetary meeting. The statement from the US central bank and Jerome Powell’s press conference are expected tomorrow evening, at 7 p.m. and 7:30 p.m. French time. The Fed’s task is considerably complicated by the invasion of Ukraine and the further spike in prices. According to the CME Group’s FedWatch tool, the probability of a quarter-point rate hike on federal funds, between 0.25 and 0.5%, on March 16 is 98.3%, compared to 1.7% for the probability of a rise of half a point. It would be the first hike in the cycle of rate hikes expected from the Fed, which must also gradually reduce its balance sheet after massive purchases of bond assets. The probability of another move higher on May 4th is nearly 100% (with nearly equal odds of a 25 bps or 50 pts move).
RISING VALUES
LetTec climbed 10%, while the broker Oddo confirmed its favorable recommendation for the title following a visit to the group’s sites, with a target price of 240 euros. The broker has a single reservation regarding governance, estimating that it will take time to resolve the uncertainties about the strategy of the next CEO in particular…
The automobile bounces back with Valeo which rose by 9% with Renault which takes up 8%, Faurecia (+8%) and Stellantis (+6.5%).
The banks are also recovering with Societe Generale (+9%), Agricultural credit and BNP Paribas (+6%).
Mersen earns 8.5%. The group unveiled a current operating profit for 2021 of 92.6 million euros, i.e. a current operating margin of 10%, an increase of 190 points. This improvement is largely due to a positive volume effect and a positive mix effect… Productivity gains and the positive effects of the restructuring plan offset the inflation of salary costs and the negative effects linked to the Covid context. In addition, price increases partially offset raw material and energy cost inflation. The Group’s EBITDA reached 148.8 million euros, i.e. a margin of 16.1%, up 160 points compared to 2020. Net income, Group share amounted to 54.4 million euros, against a loss of -€12 million in 2020.
Luxury is also rising, benefiting from the Chinese government’s announcements this morning: LVMH, Dior, Kering and Hermes earn 6-7%.
STM : +7% with Alstom, Orapi and Séché (+7%) with Technip Energie
Veralia : +6.5% followed by Fermentalg
catana : +6% with Amundi, Infotel, Remy Cointreau
Beneteau : +5% with Ubisoft, Alten, Nexans, Saint-Gobain and Groupe Gorgé
Publicis (+4.7%) announced the immediate cessation of its activities and investments in Russia with the transfer of control of its agencies to local management. Publicis Groupe is thus transferring control of its operations to Sergey Koptev, founding President of Publicis in Russia, with the contractual commitment to ensure a future for its employees in the country.
FALLING VALUES
Navya : -7.8% followed by Erytech (-3%) with Dassault Aviation (-3%), Assystem (-2.5%)
Bonduelle (-1.5%) with Waga, Carrefour, followed by ABC and Boiron with GTT and Orange.