The Liz Truss effect fades, but the Wall Street rebound revives the Cac 40


Posted Oct 20, 2022, 4:13 PM

Apathetic in the morning, the barometer of the Paris Stock Exchange suddenly surged to 6,088.52 points (+0.79%) around 2:30 p.m. on the announcement of the resignation of Liz Truss from her post as British Prime Minister. Then Wall Street, like every day, took over as the Liz Truss effect quickly faded.

The one who succeeded Boris Johnson, entangled in the “party gate” (named after the parties given at 10 Downing Street in full confinement), will only have led the government for 45 days, carried away by the “mini budget” and the volte -face on the tax cuts which had forced the Bank of England to intervene to calm the markets, and its Chancellor of the Exchequer (Finance Minister) Kwasi Kwarteng to give way to Jeremy Hunt.

On the announcement of the departure of Liz Truss, the pound sterling rose to 1.1306 dollars before returning to around 1.1219. Britain’s currency had started to rise in reaction to reports of a flurry of activity at 10 Downing Street with the visit of several members of the 1922 Committee (composed of non-government Conservative Party MPs and which plays a central role in process for choosing the leader of the party), including its president Graham Bradley.

Shortly after 4 p.m., the Bedroom 40 gained 0.71% to 6,083.50 points in a business volume of barely 1.6 billion euros. In London, the Footsie takes 0.33%. In New York, the Dow Jones and the Nasdaq Composite increased by 1%. On Wednesday, Wall Street retreated after two straight bull sessions.

Tesla drops 8%. The world leader in electric cars unveiled last night a turnover below expectations, affected in particular by the rise in the dollar, as well as by disruptions in deliveries and production. Conversely, IBM increased by 3.8%. Big Blue expects to exceed its annual growth forecast thanks to strong demand for its digital services. AT&T jumped more than 8% after quarterly results that exceeded expectations.

Hermès honors luxury, Pernod Ricard steps back

Hermes gains 1.2%. The luxury saddler reported a 24.3% growth in sales at constant exchange rates in the third quarter, driven by strong momentum in all businesses as well as the rebound in sales in China. Hermès reiterated its medium-term outlook, namely ” an ambitious goal of revenue growth at constant exchange rates despite economic, geopolitical and monetary uncertainties.

TotalEnergies rises 1.6% in the wake of the rebound of almost 3% in oil prices, carried by information relayed by Bloomberg according to which Chinese politicians are debating a possible shortening of the quarantine period imposed on foreign travelers. Crude prices suffered on Wednesday from the Biden administration’s decision to release 15 million barrels from strategic US stocks to stem rising prices.

Pernod Ricard yields on the contrary 1.3%. The spirits group expressed confidence in its outlook for the staggered 2022-2023 financial year, indicating that its ” growth should continue to be dynamic “after a start to the year” very encouraging “, which resulted in a 22% increase in its turnover in the first quarter. RBC analysts note that while sales in Asia turned out to be “ remarkable », the slowdown observed in the United States is « somewhat worrying “.

Excluding CAC 40, Veralia rises 5.6%. The glass packaging producer raised its annual adjusted EBITDA (gross operating surplus) target, after an increase in its results in the third quarter. The group is now targeting an adjusted Ebitda above 820 million euros this year, against a previous range of between 750 million and 800 million.

Edenred takes 2.4%. The specialist in payment vouchers for the world of work raised its annual forecasts after the announcement of a turnover higher than analysts’ expectations for the third quarter. It is now counting on a gross operating surplus (Ebitda) of between 810 million and 840 million euros. He was previously targeting an Ebitda of between 770 million and 820 million euros.

Finally, nokia 9.5% drop. The network equipment manufacturer generated operating profit of 658 million euros, up 3.9%, in the third quarter, against more than 702 million anticipated by the Bloomberg consensus. The group’s profit margin has suffered in particular from delays in signing license and patent agreements with mobile phone makers Vivo Communication Technology and Guangdong Oppo Mobile Telecommunications, according to Jefferies analysts.



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