Volatility is the key word in the stock market right now. This Thursday, the Bedroom 40 lost a good part of what it had gained yesterday, closing down 1.01%, at 6,206.26 points (-3% almost at the low of the day). Yesterday’s rise was only possible because, at the time of the close of the European markets, the American indices were generally on the rise, investors were trying to put into perspective the unpleasant surprise of the latest inflation figures in the States -United. Only then, the Dow Jones, the S&P 500 and, above all, the Nasdaq Composite of technology stocks, ended down sharply (today they are trying to rebound but, once again, the session is very nervous).
The camp of those who fear that, ultimately, the peak of inflation may not be behind us, ended up winning. Yesterday’s US Price Index report, showing a stronger than expected year-on-year increase, bolstered Fed rate expectations and heightened fears of a hard landing, as revealed by the report. ‘flattening the curve’ in the secondary debt market, says Jim Reid, strategist at Deutsche Bank in London. “Looking at the components of the CPI, what concerns the Fed is that there are many signs that inflationary pressures remain broad and cannot be attributed to transitory shocks such as the surge. energy prices. »
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“Sweet”
After Jerome Powell’s press conference last week, the stock market already feared that the economic landing would no longer be as soft as it had hoped, since the president of the American central bank, engaged in a strong recovery movement interest rates to fight inflation, preferred to use the word “softish” rather than “soft” – a term taken up elsewhere this week by John Williams of the Fed New York.
Today, eyes were fixed on the second statistic of the week concerning the evolution of prices in the United States, this time concerning producer prices. With the same observation as the day before, for their consumer counterpart. They have calmed down a little compared to their peak in March, without however completely reassuring on a deceleration. Over one year, producer prices rose by 11%, less than the 11.2% surge observed the previous month, but more than the 10.7% expected by the consensus. They are up 6.9% in “core” data, ie excluding volatile elements such as energy and food, against 6.6% expected. Compared to March, the increase is 0.5% in published data and 0.6% in “core”, as expected.
Hermès at less than 1,000 euros per share
In this uncertain environment, even though former Fed Chair Janet Yellen, currently Treasury Secretary, said shortly before the Paris Stock Exchange closed that the US central bank could succeed in fighting inflation without cause a recession, the shares of the most expensive companies in the Cac 40 with regard to their PER (price relative to earnings), namely Hermes, Kering and LVMH, are among the biggest declines of the day. Hermès, which fell more than 5% in session, below 1,000 euros per share, hit a low of just over a year, as did Kering.
Conversely, STMicroelectronics, which today presented its new medium-term objectives during its investor day, gained 4% on the Cac 40. The chipmaker said it was aiming for sustained revenue growth while improving its profitability. Its ambition is to achieve a turnover of more than 20 billion dollars by 2025-2027, with a gross margin of around 50%.
On the foreign exchange market, the euro fell below the threshold of 1.04 dollar, the lowest in more than five years. Statements by Christine Lagarde yesterday, suggesting that the European Central Bank would in turn raise its benchmark interest rate in July, are of no support for the single currency, while the Fed has taken a lot of advance in the normalization of its monetary policy.