The Paris Stock Exchange is starting to fall again after two consecutive sessions of increases of more than 1%, reducing its weekly progress for the time being to less than 0.5%. In New York, the Nasdaq Composite was down 1.3% on the week to Thursday’s close, while the Dow Jones gained 1% and the S&P 500 was flat.
The more aggressive tone adopted by the Chairman of the US Federal Reserve overshadowed a good start to the results season, as well as the more marked improvement than expected in private sector activity in the euro zone, particularly in services, with the continued lifting of health constraints. However, prices are posting record increases.
At 2:45 p.m., the Bedroom 40 lost 1.57% to 6,609.73 points in a business volume of 1.6 billion euros. The contracts future June on American indices evolve between a decline of 0.2% for the Dow Jones and a gain of 0.3% for the Nasdaq 100. gap drop of nearly 18% in pre-market trading. The ready-to-wear group has lowered its annual revenue growth forecast and announced the departure of the general manager of its subsidiary Old Navy.
Powell wants to act faster
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 chief hinted that investors may have underestimated the pace of upcoming rate hikes, adding that he favors large-scale actions.
The market now appears to have priced in two half point rises in May and June, following a quarter point tightening 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 Fed is seeking to stem the surge in prices, partly fueled by Russia’s invasion of Ukraine, which is a drag on activity. The containment measures affecting several Chinese cities represent another drag on the global economy and the sharp slowdown in activity in the country’s ports threatens to strengthen inflation in the coming months.
Several officials of the European Central Bank have also beefed up their speeches. Vice-President Luis de Guindos now believes that the end of the asset purchase program should take place in July, while the latest ECB statement refers to the third quarter, without further details. Pierre Wunsch, the governor of the National Bank of Belgium, meanwhile said that the central bank could bring its key rates slightly above zero before the end of the year. The expression of divergent opinions within the institution has also given rise to a call to order from Christine Lagarde. The president of the institution called on officials to avoid commenting on monetary policy decisions in the days following their announcement, usually on a Thursday, and to wait at least until the following Monday, reports Reuters citing several sources. Christine Lagarde specifically targets leaks on the content of internal debates.
Kering and Renault make the splits
Kering gives up 3.6%. 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 2%. 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 by 2.2%. 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 5.8%. 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.
Casino goes up 1%. The distributor returned to the growth of its sales in the first quarter thanks to Brazil, its second market, while the contraction of its activity slowed down in France.
At last, GTT down 4.8% 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.