The “tech” up sharply, except Twitter in the United States, the Paris Stock Exchange escapes a fourth week of decline in a row


The general rebound of the finance planet, this Friday, with in particular a gain of nearly 4% in the Nasdaq Composite index of technological stocks on Wall Street, enabled the Bedroom 40 escape a fourth week of decline in a row. The Parisian index, at the end of a very turbulent week, shows a weekly increase of 1.67%. It gained 2.52% today, to 6,344.32 points, in an unexceptional trading volume of 3.6 billion euros.

The chip maker STMicroelectronics (+6%) led the rise, after already a gain of 4% yesterday, in the wake of the presentation by the Franco-Italian group of its new medium-term objectives. STMicroelectronics had indicated yesterday, during its investor meeting, that it was aiming for sustained growth in its revenues which would be accompanied by an improvement in 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%.

More generally, the semiconductor sector has taken advantage of information from the Bloomberg agency according to which the South Korean Samsung is currently conducting discussions with its customers to raise the selling price of the semiconductors it manufactures under contract.

The European Stoxx index of technology stocks gained almost 3% today. Globally, the “tech” sector is – alongside all the most risky assets (such as high yield or cryptocurrencies) – the one that has been the hardest hit by the sell-off caused by the tightening of monetary conditions in the United States.

Concerns about inflation have turned into fears about economic growth, note strategists at Barclays. The stock market increasingly fears that in the United States, where there is a price/wage spiral, the American central bank (Fed) cannot win its fight against inflation without causing a recession. Last night Fed Chairman Jerome Powell acknowledged that the possibility of a soft landing depends on factors beyond the control of central bankers and that the return of inflation to the 2% target will be in pain.

No surrender yet

“Equities experiencing capital outflows as Treasury inflows accelerate”, observes Emmanuel Cau’s team at Barclays, but there has not yet been any panic on the equity markets. Same story at Bank of America Securities where we observe a “beginning of exodus” – investors started selling “stocks they like”like Apple or Tesla – but no real capitulation.

The rebound of the day would therefore be due to a short-term rally in a “bear market”. Since the major stock indices around the world have already fallen by more than 20% compared to their record at the beginning of the year, or close to it, some investors are starting to reposition themselves.

On Wall Street, in this environment of distrust, where volatility is only the reflection of the nervousness of investors lacking benchmarks, the S&P 500 is on the way to aligning a sixth week of decline in a row – which hadn’t happened for over ten years – even though the index is up more than 2% today. Against the trend, Twitter fell nearly 10% as Elon Musk announced that his proposed $44 billion takeover was on hold.

“Investors are faced with a difficult choice”, explains Laurent Denize, investment manager at Oddo BHF AM. What is it? Reduce the level of risk again by supporting the overall economic deterioration in a market that has already corrected or reweight equities by favoring the results of companies that are currently solid but potentially at risk. He settles the debate: for Europe, “Current earnings estimates for 2022 are overly optimistic with China’s economic slowdown, deteriorating global economy and energy supply shock. »




Source link -91