(Boursier.com) — Did Santa Claus arrive early in the trading rooms? After an incredible nine-week bullish series, the CAC40 has dropped 3.37% over the last five sessions (6,453 pts this Friday evening) and signs a second consecutive week of decline. Thursday, the Parisian index even suffered a setback (-3.09%) whose magnitude had not been so strong since March 4 (-4.97%).
Investors who had bet on a ‘pivot’ of the major central banks are at their expense. In quick succession, the Fed, the Bank of England and the European Central Bank indicated that their restrictive policy was far from over. The three BCs raised their key rate by 50 basis points, as expected, but they turned out to be more ‘hawkish’ than expected for the coming months.
On Wednesday, at the press conference following the monetary meeting, Jerome Powell, head of the Federal Reserve, reiterated that monetary policy was still not restrictive enough, although policy decisions are taken meeting by meeting, in depending on incoming data… Any talk of monetary easing will only happen when the FOMC is convinced that inflation is coming down. Not tomorrow the day before.
On Thursday, while the ECB also decided to slow the pace of its interest rate hike (50bp vs. 75bp), it pointed out that policy tightening should be extended and announced that it would begin in March to reduce the liquidity provided to the financial system, an additional weapon in its fight against inflation. Christine Lagarde pointed out that the two main takeaways were that not only will the Central Bank raise interest rates further, but that interest rates will still have to rise ‘significantly’ at a steady pace to reach levels restrictive enough to ensure a rapid return of inflation to our medium-term objective of 2%.
Despite fears of recession, crude oil prices regained a little height this week (+3.5%) with a barrel of Brent trading around $79 on Friday. On the currency market, the dollar index is close to 104 pts while the euro continues to rise, above $1.06 between banks. Bitcoin is trading below $16,900 tonight.
VALUES
* Elior jumped 12.2%, supported by several analyst notes. Citigroup raised its opinion on the stock to ‘buy’ with a price target raised from 3.3 to 4.1 euros. At the end of the week, it was Exane BNP Paribas which raised its advice on the file to ‘outperform’ by maintaining its target price at 4.4 euros.
* Vallourec picked up 6.1%, in the wake of crude oil prices.
* Neoen gains 4.2%. The renewable energy producer has benefited from particularly promising news in recent days: winning several contracts (including 180 MW of solar and wind projects during the last government call for tenders in France), long-term agreement to supply 90 MWp of green energy to the fashion group H&M from its Hultsfred solar park in Sweden, or the launch of the construction of the largest solar park in Portugal. On the analyst side, Barclays raised its opinion on the value to ‘overweight’ while raising its target from 40 to 47 euros. For the broker, the company has a balanced set of assets and its portfolio of projects has improved.
* Valeo advance of 4.1%. In accordance with his commitments made on March 30 in the context of his appointment as Chairman of Orange, Jacques Aschenbroich will cease his duties as Chairman of the Board of Directors and Director of Valeo the 31st of December. He will be replaced in his role as Chairman of the Board by Gilles Michel as of January 1, 2023.
Conversely, * Plastivaloire dropped by 12.4%, penalized after the announcement of heavy annual losses despite rising activity. Over the 2021-2022 financial year, the automotive supplier suffered a net deficit of 20.2 ME, compared to a loss of 8.8 ME over the previous financial year, for a turnover of 704.2 ME, in 4% increase despite the persistence of stop & go periods, particularly in the first half.
* Worldline stumbles by 9.9%, with Atos (-11.1%) and Capgemini (-7.3%). The technology compartment was once again penalized by the rate increases on the bond market on expectations of continued monetary tightening by the major central banks.
* Kering drops 6.2%, with Hermes (-2.8%) and LVMH which fell by 3.7%. The publication of gloomy economic indicators in China has cast a chill over the compartment as the country has just greatly eased its multiple restrictions put in place to fight the coronavirus pandemic. Retail sales notably fell 5.9% last month, the worst performance since May, when a containment was in force in Shanghai. Analysts had expected a drop of 3.7%, against a decline of 0.5% in October. Industrial production also increased by 2.2% year on year in November, against a gain of 5% the previous month.
* Crossroads loses 5.7%. The latest data from Kantar Worldpanel for P11 2022, i.e. the period from October 30 to November 27, is not very good for the king of hypermarkets since if the trio Leclerc, Intermarché and Système U shows market share gains of 0, 2 point on the sequence, Carrefour loses 0.2 pdm (stability in supers), against +10 to +30 bp previously observed in 2022. As noted by Bryan Garnier, Carrefour thus loses ground for the first time in France in 2022 Whether this new trend is sustainable remains to be seen, as Carrefour was accustomed to gaining market share through its strong private labels and promotions.
* ArcelorMittal yields almost 5%. The selling pressure on the steel giant is linked to a note from Bank of America which downgraded its recommendation to ‘neutral’ with a target set at 28 euros. Despite everything, the market remains largely positive on the stock since, according to the ‘Bloomberg’ consensus, 14 analysts are ‘buy’, 5 are ‘hold’ and only 1 is ‘sell’. The average 12-month target is set at 33.17 euros.
* bioMerieux down 1.9%. The in vitro diagnostics specialist, however, raised its 2022 targets due to an early and rapidly spreading flu epidemic, combined with the high prevalence of respiratory syncytial virus (RSV) and Covid-19. 2022 revenue growth (at constant scope and exchange rates) is now expected to be stable (previously the upper limit of the range -6% / -3%) and contributive current operating income should be above €660 million. euros (previously the upper limit of the 580 ME / 625 ME range).