The Paris Stock Exchange is starting to fall again after two consecutive sessions of increases of more than 1%, thus virtually erasing its weekly progress. Wall Street is hesitant in the first exchanges while the president of the American Federal Reserve endeavored to confirm the more restrictive turn adopted by the central bank in terms of monetary policy. This more “hawkish” approach overshadowed a good start to the quarterly results season, as well as the more marked improvement than expected in private sector activity in the eurozone, particularly in services thanks to the reduction in health constraints. . However, prices are posting record increases.
Shortly after 4 p.m., the Bedroom 40 lost 1.70% to 6,601.19 points in a business volume of 2 billion euros. In New York, the Dow Jones yields 0.96% and the Nasdaq Composite picks up 0.11%. Alphabet falls by 1%, while gap 19% drop. The ready-to-wear group has lowered its annual revenue growth forecast and announced the departure of the general manager of its subsidiary Old Navy.
Powell wants to act faster
Jerome Powell said on Thursday that a half-point hike in the Fed funds rate “ will be on the table of the May monetary policy committee meeting, adding that it would be appropriate ” to act a little faster “. Speaking in a panel discussion on the global economy hosted by the International Monetary Fund, the Fed chief hinted that investors may have underestimated the pace of upcoming rate hikes, adding that he favors large-scale actions.
If the markets had already priced in a half-point hike in May after the quarter-point hike decided in March, ” they fear the Fed will get tough for longer by subsequently opting for two more 50 basis point hikes by the end of the summer notes Michael Hewson, chief market analyst at CMC Markets. Nomura analysts go further, expecting two 75 basis point hikes in June and July, the highest since 1994.
The ECB is also raising its tone
The Fed seeks to stem the surge in prices, partly fueled by the war in Ukraine, which is a brake on activity. The containment measures affecting several Chinese cities represent another drag on the global economy, and the sharp slowdown in activity in the country’s ports threatens to strengthen inflation in the coming months.
Several officials of the European Central Bank have also beefed up their speeches. Vice-President Luis de Guindos now believes that the end of the asset purchase program should take place in July, while the latest ECB statement, dated last week, refers to the third quarter, without further details. . Pierre Wunsch, the governor of the National Bank of Belgium, meanwhile said that the central bank could bring its key rates slightly above zero before the end of the year. The expression of divergent opinions within the institution has also given rise to a call to order from Christine Lagarde. The president of the institution called on officials to avoid commenting on monetary policy decisions in the days following their announcement, usually on a Thursday, and to wait at least until the following Monday, reports Reuters citing several sources. Christine Lagarde specifically targets leaks on the content of internal debates.
Kering Cac 40 red lantern
Kering gives up 4.7%. The luxury group published a turnover up 27.4% in the first quarter, the good performance of Yves Saint Laurent and smaller brands offset the slowdown in organic growth of Gucci. The latter came out at 13.4%, against around 19% expected by analysts, penalized by the Asia-Pacific region and containment measures in China.
Renault gains 0.7%. The automaker confirmed its annual targets as its revenues fell 2.7% in the first quarter, penalized by the shortage of semiconductors and the fall in its activity in Russia. The group has indicated that the plan to split up the electricity business is progressing and could lead to an IPO of the latter in the second half of 2023.
EssilorLuxottica plaice of 2.9%. The eyewear manufacturer announced that it recorded strong growth of 38% in its turnover in the first quarter, fueled in particular by the integration of the Dutch distributor of optical products Grandvision.
Office Veritas advance of 5.5%. The certification specialist saw its turnover increase by 11.7% to 1.29 billion euros in the first quarter. Organic growth came out at 8%, nearly twice as much as analysts expected. The group also confirmed its forecasts for the full year.
Casino wins 3.1%. The distributor returned to the growth of its sales in the first quarter thanks to Brazil, its second market, while the contraction of its activity slowed down in France.
At last, GTT down 4.5% after warning of the impact of the war in Ukraine on its targets. The group, which designs tanks for maritime transport and the storage of LNG carriers, indicated that “ Given the international sanctions currently in force, which are increasingly affecting liquefied natural gas projects in Russia, the pursuit and proper performance of these contracts are subject to risks that the group is unable to assess. nowadays said GTT in its quarterly report.