(Boursier.com) — Very hectic week on the world stock markets. In Paris, the CAC40 dropped 4.22% over five sessions, to 6,258 points this Friday evening. The news of the last few days has been marked by a new wave of company publications, which are generally solid, even if the forecasts of certain companies have been harshly sanctioned. But it was the Fed’s monetary policy decision that grabbed all the attention this week in an environment characterized by galloping inflation, rising bond rates and growing fears of an economic slowdown or even recession.
As expected, the Federal Reserve raised its main interest rate by half a point to between 0.75% and 1%, the first move of such magnitude since 2000, and added that further tightening would be “appropriate” in the coming months in order to combat inflation. Asked about the possibility of an even greater monetary tightening, of 75 basis points in future meetings, Jerome Powell felt that this was not an “actively” considered hypothesis by the Fed.
Although these statements were initially well received by operators, many believe that the Fed will ultimately have no other choice to fight against inflation. But how will the American Central Bank manage to calm this price vigor without harming the growth of the economy, already weakened by the war in Ukraine and the health restrictions in China? That’s the whole question…
On the corporate front, oil stocks were supported by the further rise in black gold prices (Brent is trading around $113 tonight), supply concerns with a possible European embargo on Russian imports currently outweighing the uncertainties linked to global economic growth. Ubisoft has been boosted by takeover rumours, and the results of Arkema, BNP Paribas and Stellantis were hailed. Conversely, JCDecaux suffered after forecasts deemed disappointing, luxury was neglected as the situation in China continues to worry and tech was carried away by the fall of the Nasdaq against a backdrop of strong tensions on bond rates.
VALUES
* Ubisoft soared 14.2%, further boosted by takeover rumours. According to an article by ‘Dealreporter’, the Guillemot family is evaluating a partnership with a private equity firm, the names of KKR & Co and Blackstone being mentioned in particular. In light of the fall in the share price since 2018 and the current macroeconomic environment, Ubisoft’s management may believe that the company would be better able to operate outside the markets, according to ‘Dealreporter’. ‘Bloomberg News’ had already recently reported that the video game publisher was in the sights of several investment companies, including Blackstone and KKR & Co. “Ubisoft, which is behind the ‘Assassin’s Creed’ franchise, has not entered into any serious negotiations with potential buyers, and it is not clear whether its main shareholder is willing to conclude an agreement,” the agency’s sources said at the time.
* TotalEnergies gains 7.2% and Vallourec climbed 6%, driven by the rise in crude oil prices. Vallourec also announced the partial restart of the operation of its iron mine in Brazil, without using the tailings site, after having obtained the agreement of the mining authorities for this purpose for a period of three months. Under this temporary regime, made possible by the possibility of using alternative storage areas, the objective is to gradually move from 70% to full production.
* Arkema advance of 6.5%. The chemical company clearly exceeded analysts’ expectations in the first quarter and raised its 2022 Ebitda guidance. been driven by its acceleration in high-performance materials, its ability to integrate cost increases into its selling prices and its agility in a complex global environment.
* Alstom increased by 5.7%. Ahead of the publication of the company’s annual results on May 11, Citi reiterated its ‘buy’ opinion on the file. The bank says free cash flow, which has been “the main market debate” and has weighed on the stock over the past year, is expected to return to positive territory in the second half and beyond. Additionally, the many recent headwinds, from increased capital spending to R&D costs, should normalize as recent contract wins may also eventually pay off.
* Stellantis (+1.1%) revealed net revenue above analysts’ expectations in the 1st quarter of 2022 and confirms its annual guidance. The car manufacturer achieved net revenues of 41.5 billion euros in the first three months of the year, up 12% compared to the Pro Forma result of 37 billion euros for the 1st quarter of 2021 (36.16 billion euros). consensus), reflecting dynamic pricing, a solid vehicle mix and favorable currency effects.
Conversely, * JCDecaux fall of nearly 14% despite the publication of a turnover growth of more than 50% in the first quarter. Investors focused on the company’s guidance for the current quarter. In this case, management has indicated that it is aiming for organic growth of more than 15% over the period. Activity should therefore remain very dynamic, but the market was expecting more. Goldman Sachs (‘sell’) for example says the Q2 growth target is well below its forecast, reflecting the impact of Covid-related restrictions in China.
* Hermes stumbles 12.2% with Kering (-10.8%) and LVMH (-9.3%). The luxury segment has been neglected by operators, worried by the situation in China where many large cities are still confined while Beijing continues to apply its ‘zero-Covid’ policy to deal with the pandemic.
* Axa returns 10.5%, after the announcement of a 2% increase in its turnover in the first quarter, the activities of the French insurer in the field of health and damage having compensated for the decline in income from savings and life insurance. The group said it was confident in its ability to achieve the objectives of its 2023 plan despite the geopolitical repercussions of the conflict between Russia and Ukraine.
* L’Oreal gives up 9.4%. In addition to the situation in China, the world’s number one cosmetics company was weighed down by the warning from Estee Lauder. The French giant’s American competitor has lowered its 2022 earnings forecast, citing the situation in China where store closures and supply chain disruptions are strong, but also higher costs and disruptions in Europe. due to Russia’s invasion of Ukraine. Jefferies notes that China is “less essential” for L’Oréal than for Estée Lauder, representing “only 20%” of its sales compared to 36% for the American company, nevertheless a “significant” downside risk weighs on the estimates current consensus on the level of organic growth expected in the second quarter (+8.7%).
* Dassault Systems plunged 7.1%, carried away, like the sector, by the fall of the Nasdaq against a backdrop of soaring interest rates.