The specter of more rapid and severe monetary tightening than expected destabilized the financial markets. At the close, the Bedroom 40 dropped 1.99%, wiping out its performance (-0.12%) over four days (the stock market was closed on Monday for Easter). The threshold of 6,700 points, which had been conquered on Thursday, is abandoned, the Parisian index even sinking below 6,600 points on the eve of the weekend, at 6,581.42. The business volume totaled 3.9 billion euros. Across the Atlantic, the trend is similar: the Dow Jones and the Nasdaq Composite extended their decline, yielding 1.5% and 0.7% respectively.
During a debate on the economy organized by the International Monetary Fund (IMF), the head of the American Federal Reserve Jerome Powell was clear: the scenario of a 50 basis point hike in interest rates Fed-funds ” will be on the table at the May 3-4 Fed meeting. The objective is to act a little faster against inflation, which is at its highest for 40 years in the country, justified the head of the institution. The market, which had recently relegated this theme to the background, too busy analyzing company results, took fright. Jerome Powell’s remarks are being interpreted as promising at least two half-point hikes by summer, after a quarter-point tightening in March. Nomura analysts, for their part, anticipate two rises in the cost of interest by 75 basis points in June and July, which would be unheard of since 1994. On the bond market, the yield on Treasuries rose to at 2.975% and that of two years by eight points at 2.789%.
In the euro zone, the tightening virus is not sparing the European Central Bank (ECB). Several of its officials have toughened up their rhetoric, like Vice-President Luis de Guindos, who pleads for an end to the asset purchase program in July, and not in the third quarter, or Pierre Wunsch, the governor the National Bank of Belgium, which estimated that the ECB could bring its key rates slightly above zero before the end of the year. These statements are not to the taste of the president of the institution, Christine Lagarde, who called her teams to order. According to information relayed by the press agency Reutersthe Frenchwoman would have asked ECB officials to avoid expressing dissenting opinions on monetary policy decisions during the days following them.
Kering took on water
This more “hawkish” approach by the Fed obscured the quarterly results of companies, which were very numerous. The operators had to separate the wheat from the chaff, which sometimes led them to severely sanction certain publications. Last of the “Khol” to publish its turnover as of March 31, Kering was reserved for the decline at the start of the session, before ending on a sharp decline of 4.32%. While sales of the luxury group rose 27.4% as reported, those of its flagship brand, Gucci, slowed, increasing only 13.4%, after growth of 31.6% in the fourth quarter of 2021. The group invokes the latest confinements in China to explain this underperformance.
Also down, EssilorLuxottica fell 2.62%, after the announcement of a turnover yet up 38.1% in the first quarter, to 5.6 billion euros. It was more the forecasts that disappointed: the eyewear manufacturer warned that the restrictions put in place in China to fight against Covid-19 will weigh on activity in April and that the impact of inflation will be more marked. than expected in the second and third quarters than in the first.
The Renaulution plan is bearing fruit
Renault lost 1.34%. The automaker’s quarterly figures inevitably bear the marks of the war in Ukraine, since Avtovaz’s contribution fell by 23.1%. Nevertheless, thanks to its Renaulution plan, which emphasizes value creation, upscaling and prices, the group saw its turnover fall by only 2.7% as of March 31, to 9, 7 billion euros. Renault is considering an IPO of its electrical activities in 2023.
On his side, vinci (-1.85%) published a quarterly turnover of 12.85 billion euros, up 26% year on year in reported data and 12% like-for-like. This allows management to confirm its 2022 forecasts, in particular a net result higher than that of 2019. For Vinci Airports, the group expects traffic representing around 60% of its 2019 level.
Finally, among the other companies that disclosed results, Office Veritas (+4.57%) and Ipsos (+4.51%) ended up, while GTT dropped 4.24%.
PC