(Boursier.com) — New weekly decline for the Parisian market, overtaken by the war in the Middle East, the surge in bond rates and the surge in crude oil prices. Over five sessions, the CAC40 lost 2.67% to 6,816 points this Friday evening, the lowest since mid-March. The situation continues to deteriorate in Israel, as the Jewish state prepares to launch a ground offensive in the Gaza Strip and clashes expand to the West Bank and the border with Lebanon.
“The current situation in the Middle East has triggered a surge of volatility in the oil and stock markets, forcing investors to reevaluate their strategies and move from riskier assets to investments deemed ‘safer,’” he told ‘Bloomberg’. Fawad Razaqzada, market analyst at Forex.com.
In this context, investors have abandoned risky assets and moved towards safe havens, with gold in the lead. On the sovereign bond market, the week was marked by the surge in rates like the American 10-year which exceeded the 5% mark for the first time in 16 years after new resilient economic indicators in the United States and not very encouraging statements from Jerome Powell.
“The strength of the American economy and the persistence of tensions in the labor market could justify further increases in interest rates from the Federal Reserve,” said the head of the Fed. For inflation to sustainably return to the Fed’s 2% target, it “will likely require a period of below-trend growth and further easing of labor market conditions.”
The last few days have also seen the pace of company publications accelerate, with both good and less pleasant surprises. If Pernod Ricard assured, Renault, Rexel And L’Oreal disappointed. Next week, half of listed companies must publish their results in the United States, and 30% of these companies in Europe, according to Barclays calculations…
On the currency front, the euro is trying to climb back towards $1.06. Brent prices rose by more than 2% over the week, close to $93. Finally, Bitcoin is enjoying a big rebound and is moving around $29,600 on Coindesk.
VALUES
* Pernod Ricard advance of 5.6%. The spirits group, as expected, experienced a difficult start to the 2023-2024 financial year with a decline in its turnover of 8% to 3.042 billion euros, penalized by the decline in its sales in the United States and in China. The consensus was positioned at 3.07 billion euros. Pernod Ricard warned at the end of August of a “more modest start” to the first quarter, after a better than expected 2022-2023 financial year, due to the slowdown in China and the United States. For the entire financial year, the group anticipates favorable prospects in China and the United States and expects “strong” growth in India and in travel retail. Management is therefore counting on “diversified” turnover growth for its 2023-2024 financial year and reiterates its medium-term outlook, namely internal sales growth at the top of a range of between +4% and + 7%.
* Worldline climbs 5.5%, boosted by promising news. In addition to the rumors surrounding the Italian Nexi, the specialist in electronic payment services benefits from the support of Goldman Sachs which reiterated its ‘buy’ opinion on the stock despite a target lowered from 45 to 39 euros. Citi also confirmed its ‘buy’ advice with a target of 40 euros.
* Remy cointreau gains 3.6% in the wake of its French counterpart. Goldman Sachs also maintained its ‘buy’ recommendation on the spirits group, while adjusting its price target from 205 to 180 euros.
Conversely, * Technip Energies drops by 10%, heckled after the revelations in ‘Le Monde’. On its website, the daily “reveals how the engineering company limited its financial losses by delaying its exit from the Arctic LNG 2 plant site after the start of the Russian invasion in Ukraine.” The newspaper recalls that Technip Energies was playing big since “the contract it won to supervise the engineering and construction of the project, in Russia and China, amounts to more than 7 billion euros”. This new gas liquefaction mega-plant should increase Moscow’s LNG export capacities by 60% by 2026. Technip Energies responded by indicating that it had “worked with the relevant authorities and complied with the sanctions imposed progressively by the European Union, the United States and the United Kingdom. Given the complexity and multiplicity of sanctions, the company carried out a rigorous analysis of all exported equipment, including thousands of components of the two utility-type modules delivered after May 2022, in order to apply the appropriate customs codes… Technip Energies acted responsibly within the framework of the ALNG2 project by respecting, in order of precedence, international sanctions, and its contractual obligations.
* Euroapi loses another 9.4% after being heavily sanctioned last week in the wake of the disappointments in figures. The big warning on its results still does not come through and analysts continue to revise their forecasts downwards, like Berenberg which cut its target from 16.9 to 6.6 euros, while remaining on the purchase side. The manufacturer of active pharmaceutical ingredients now expects annual growth of between +3% and +5%, compared to +7% to +8% previously.
* Renault stumbled by 8.3% after the presentation of quarterly accounts that were a little short compared to market expectations. In the 3rd quarter, the manufacturer’s turnover stood at 10.5 billion euros, up 7.6% (+13.8% at constant exchange rates) but slightly lower than analysts’ expectations (10. 77 MdsE). Sales showed an increase of 6.1% worldwide and 15.3% in Europe. The manufacturer reiterated its 2023 financial outlook, namely an operating margin between 7% and 8%; free cash flow greater than or equal to 2.5 billion euros; with the Group’s operating margin for the second half higher than that of the 1st half, which amounted to 7.6%.
* STMicroelectronics drops 8.3% in “sectoral” news dominated by the caution of Ericsson and Nordic Semiconductor, as well as the strengthening of restrictions on the export of chips from the United States to China. Washington has indeed decided to restrict the sale of Nvidia chips designed specifically for the Chinese market as part of new measures aimed at blocking access to China to a technology considered essential for the development of AI and ‘cutting edge ‘ for military use. The stricter controls will particularly target Nvidia A800 and H800 chips, a senior US official said.
* Rexel fell by 7.4% despite the confirmation of its 2023 objectives. The distributor of electrical equipment revealed quarterly turnover of 4.67 billion euros, up 2.6% on a constant day. The consensus was expecting a slightly more marked increase of 3%. Volumes are up +2.3% on a high base effect linked to electrification products and a more contrasted market environment, demonstrating the strength of Rexel’s positioning in its markets. The pricing environment remains favorable for non-cable products, up +1.3% over the quarter. The 2023 objectives have therefore been confirmed with resilient growth, sustained profitability and strong cash generation thanks to the group’s strategic action plans. On track to achieve its 2025 ambitions, Rexel has specified that an update of the strategic roadmap will be presented during an investor day to be held in June 2024.