The Paris Stock Exchange fell sharply after two consecutive sessions of increases above 1%. The more aggressive tone adopted by the Chairman of the US Federal Reserve in terms of monetary policy completely overshadowed a good start to the earnings season as well as the stronger than expected improvement in private sector activity in the euro zone.
Mid-session, the Bedroom 40 lost 1.70% to 6,601.15 points in a business volume of nearly 1.2 billion euros. June futures on US indices fell between 0.3% and 0.4%.
Increases of 75 basis points?
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 chairman hinted that investors may have underestimated the pace of upcoming rate hikes and that he favors stocks of magnitude. He added that it would be appropriate to act a little faster “.
These remarks are perceived by investors as the promise of at least two increases of half a point in May and June, after a tightening of a quarter point in March. Nomura analysts anticipate for their part two increases of 75 basis points in June in July, the first not seen since 1994.
The American central bank thus intends to act to contain the surge in inflation, partly fueled by the invasion of Ukraine by Russia, which is a drag on activity as the labor market begins to be under tension. . The containment measures blocking several Chinese cities represent another brake on the world economy and, due to the sharp slowdown in activity in the country’s ports, could increase inflation in the coming months.
The tightening virus is not sparing the European Central Bank. Several of its leaders have hardened their rhetoric. Vice-President Luis de Guindos now believes that the end of the asset purchase program should come in July, while Pierre Wunsch, the governor of the National Bank of Belgium, has said that the ECB could cut rates managers slightly above zero before the end of the year. Opinions that prompted a call to order from Christine Lagarde, who asked central bank officials to avoid divergent opinions on monetary policy decisions in the days following their announcement.
Kering and Renault make the splits
Kering gives up 4.9%. 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.
Down this morning Renault now earns 0.%. 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 1.8%. 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 4.8%. 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.
At last, GTT down 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.