indices devises

The New York Stock Exchange signed its worst session since 2020 on Thursday, investors taking the opposite view of the rebound of the previous day following a second reading of the Fed’s announcements on Wednesday.

The Nasdaq recorded the third largest point loss in its history, following the two black sessions on March 12 and 16, 2020, at the start of the coronavirus pandemic.

The tech-heavy index tumbled 4.99%, while the Dow Jones fell 3.12% and the broader S&P 500 index fell 3.56%.

“We had one of the best sessions yesterday, and one of the worst today,” said Angelo Kourkafas of Edward Jones.

After enthused on Wednesday by comments by US central bank (Fed) Chairman Jerome Powell, who had ruled out even more monetary policy tightening and a 0.75 percentage point hike in his next meeting, the market regained its senses on Thursday.

“The fact (that the US central bank) ruled out a 0.75 percentage point hike hasn’t really changed the fact that the economy is slowing and the Fed is going to tighten monetary policy at a high pace,” he said. explained Angelo Kourkafas.

“People started to think a little more regarding the Fed and its communication and realized things weren’t going to get better,” said Maris Ogg of Tower Bridge Advisors.

For her, Thursday’s movement is also explained by profit-taking, which followed the jump the day before, as well as by the surge in bond rates.

“That’s what scared the stock market,” she said.

The yield on 10-year US government bonds soared above 3.10% for the first time since November 2018.

As usual, the first to come under the fire of investors were technology and growth stocks, which now weigh the heaviest on Wall Street.

Apple (-5.57%), Microsoft (-4.36%), Tesla (-8.33%) or Amazon (-7.56%) were roughed up. The latter is down nearly 20% since the publication of its results a week ago, and has erased more than 280 billion in market valuation.

The New York market was also taken the wrong way by some mixed corporate results, accompanied by very measured, even pessimistic forecasts.

“Companies with the best numbers usually publish first” during earnings season, says Maris Ogg. “Bad ones come later,” which is right now, she says.

Wall Street notably ticked over a series of publications from e-commerce sites deemed to be without panache, even worrying.

The online sales site eBay suffered from lower than analysts’ projections for the second quarter (-11.72% to 48.04 dollars), despite sales and earnings above the Wall Street consensus.

The e-commerce platform Shopify also collapsed (-14.91% to 413.09 dollars), following the publication of a turnover much lower than expected, as well as a significantly higher loss.

Twitter benefited (+ 2.65% to 50.36 dollars) from the communication of Elon Musk, who managed to raise seven billion dollars from investors to finance the takeover of the platform.

This sum, collected from funds and wealthy investors such as the entrepreneur Larry Ellison or the Saudi prince Al-Walid ben Talal, will make it possible to reduce the amount borrowed from banks for the operation.

Snap (-9.58%), Meta (parent company of Instagram, -6.77%) or Alphabet (parent company of YouTube, -4.76%) suffered following their fiercest competitor, TikTok, revealed Wednesday that it was going to set up an ad revenue sharing system with the platform’s most popular creators.

“The market will continue to be volatile and seesaw until we have confirmation that inflationary pressures subside and bond rates with them,” said Angelo Kourkafas.

Nasdaq

(CercleFinance.com) – After spending the day in positive territory, gaining up to 2.5%, the Parisian index tipped into the red around 5 p.m., before ending the session with a loss of 0 .43%, at 6,368 points, following having suffered a fall of -200 Pts on the highest of the day (in a straight line, without the slightest rebound, between 6,559 and 6,351): this is one of the most spectacular counterbalances of the year …and it’s much worse on Wall Street.

The downward momentum is also blowing on the E-Stoxx50 (-0.9%) and Frankfurt (-0.6%) while London limits the breakage (+0.2%).

Across the Atlantic, the indices relapsed heavily: it did not get any better at mid-session with up to -1,100 Pts on the Dow Jones (-3.3%), -3.7% on the S&P500 and -5 .2% for the Nasdaq Composite (below 12,300Pts), following having signed one of the strongest increases of the 21st century the day before on the day of the Fed’s decision (+3% for the S&P500, +3.2% for the Nasdaq Composite).

No improvement is emerging 2 hours before closing… we had to wait until 8:40 p.m. the day before.

This morning, the markets had welcomed in a somewhat unbridled (and inconsistent?) way the assertion that the FED would not go beyond a half-point hike in the main interest rate, whatever the inflationary context, while some of Jerome Powell’s colleagues had mentioned and supported a ‘shock strategy’ of +75 basis points.

Another change in monetary policy, the central bank has indicated that it will begin to reduce the size of its gigantic balance sheet by -47.5 billion dollars from next month, before going to -90 billion dollars, or 1% of the outstanding amount, which today amounts to nearly 9,000 billion dollars.

At his press conference, Jerome Powell, the institution’s chairman, assured Americans that the Fed would do everything possible to quickly bring inflation under control and set itself the objective of a ‘soft’ landing for the economy, i.e. an ebb of inflation without the onset of recession.

But the bond markets are skeptical to say the least: the yield on 10-year US Treasury bonds quickly rose from 2.92% around 8:40 p.m. to 2.965% this morning, then 3.04% this followingnoon, at the highest since 2018.

Opposite also spectacular on our OATs (from -9pts to +2.5pts at 1.536%) and from -7pts on Bunds to +3pts at 1.011%.

With the Fed meeting now over, investors learned, unsurprisingly, of the Bank of England’s decision to raise its key rate from 0.75% to 1.00% (also caught between galloping inflation and deteriorated business outlook): this seems insufficient and the Pound tumbles -2% once morest the Dollar towards 1.237.

On the ‘macro’ front, there were the figures for industrial production in France on the program. In March, it fell in manufacturing industry (−0.3% following −0.9%) as in industry as a whole (−0.5% following −1.2%), according to data corrected for seasonal and working day variations (CVS-CJO) from INSEE.

In particular, production fell once more in transport equipment (−2.8% following −1.5%): it fell sharply in the automotive industry (−7.3% following −5.4%) while ‘it is stable in other transport equipment (following +1.2%).

Production over the whole of the first quarter of 2022 was nevertheless higher than that of the same period of the previous year in manufacturing industry (+1.2%) and in industry as a whole (+0, 3%).

There were also figures in the United States and in particular non-agricultural productivity: this plunged by -7.5% in the United States in the first quarter of 2022 at an annualized rate, according to the preliminary estimate of the Department of Labor. , a fall much greater than that expected on average by economists (-4%).

This plunge reflects a 2.4% drop in production even though the number of hours worked increased by 5.5%. Combined with a 3.2% increase in hourly wages, it leads to an 11.6% surge in unit labor costs.

The number of weekly registrations for unemployment benefits increased by +19,000 the week of April 25 in the United States, settling at 200,000, once morest 181,000 a week earlier: it was a 50-year low.

The four-week moving average stands at 188,000, up 8,000 from the revised level of the previous week.

Finally, during the week of April 18, the number of people regularly receiving benefits stood at 1,384,000, a decrease of 19,000 compared to the figure for the previous week.

The Dollar is not too affected and remains stable over 24 hours towards $1.0530 ( once morest 1.0640 Wednesday evening) and the real half-surprise of the day is the continuation of the oil surge towards $112 at London (Brent), which supports Total Energies with +2.2%, thanks to which the CAC40 remains positive.

In the news of French companies, Societe Generale publishes net income, underlying group share up 21.3% to 1.57 billion euros for the first quarter of 2022, as well as gross income of underlying operating up 37.6% to 2.96 billion.

Crédit Agricole SA says it has opted for a ‘prudent’ provisioning regarding its exposure to Russia and indicates in a press release that over the first three months of the year, net income, underlying group share, was down 19 %, at 756 million euros.

Legrand unveils net income group share up 13.3% for the first quarter of 2022, at 258 million euros, despite an adjusted operating margin before acquisitions (at 2021 scope) down one point to 20, 6% of sales.

Finally, Air France-KLM publishes a net result of -552 million euros for the first three months of the year, an improvement of 930 million over one year, as well as an operating result of -350 million , but a positive EBITDA of 221 million.

The territorial development group REALITES announces that it has signed a firm letter of intent on May 5, 2022 with the family holding company FDNGT to support the dynamic activity observed since the beginning of the financial year and ensure the success of its “Ambitions 2025” plan. . Its objectives are to achieve a turnover of €800 million with an operating profit rate of 8%.
This agreement provides for a capital increase for a total amount of 35 million euros, including 30 million euros to be subscribed by the FDNGT family holding company. The founding directors and managers will subscribe for a total of 5 million euros, demonstrating their commitment to the Group’s strategy and their desire to be supported over the long term by quality and trusted partners.
The completion of the capital increase is scheduled for the end of the first half of 2022.

The Paris Stock Exchange, which had opened sharply higher the day following the Fed meeting, finally concluded its session down on Thursday, caught up by the American markets and the general economic context.

The star CAC 40 index lost 27.28 points to 6,368.40 points. The day before, it had fallen by 1.24%.

The Paris Stock Exchange had however started the day with a gain of 2.40% to 6,549.49 points, its highest for the session. The index fell little by little and stalled following the opening of the American markets.

“Investors were reassured yesterday regarding the pace” of the increase in the US Federal Reserve’s key rate, said Pierre Blanchet, head of economic intelligence at the Amundi Institute, to AFP.

Bank chairman Jerome Powell rejected any 0.75 percentage point rate hike, a prospect that had scared markets for days.

The Fed opted for a half-percentage-point hike at this meeting and is expected to maintain that trend for at least next month.

This information had carried Wall Street on Wednesday then the European stock market. But US markets went the other way on Thursday, losing more than 3% shortly following the Paris close.

“The general trend is not very good” between the confinements in China and the war in Ukraine, recalls Mr. Blanchet.

The sharp rise in inflation, which might even exceed 10% in the United Kingdom according to the Bank of England, is also changing the configuration of the market, putting more difficulty in technology stocks, which prefer a low rate environment, explains does it too.

Sovereign rates, which set the trend for those of the rest of the economy, continued their sharp rise: the French 10-year rate reached 1.57%, while the American rate soared above 3%, to 3 .08%.

Finally, the euro also fell by more than 1% once morest the dollar (-1.04% to 1.0512 dollars around 6:45 p.m.), which benefits from its status as a safe haven and the monetary tightening of the Fed.

Airbus takes off

Airbus shares rose 6.28% to 109.02 euros following the European aircraft manufacturer more than tripled its quarterly profit over one year to 1.22 billion euros. Airbus has also displayed great ambitions by aiming for a monthly production of 75 A320s in 2025, unheard of for its star single-aisle aircraft.

The airline Air France-KLM, which divided its loss in the first quarter by three and said it was optimistic for the summer, also took 2.05% to 3.99 euros.

Crédit Agricole and Société Générale tossed around

The Crédit Agricole bank fell 4.01% to 9.98 euros following reporting a net profit down 24.1% in the first quarter.

Societe Generale fell 2.56% to 22.43 euros following the announcement of a net profit up slightly in the first quarter. Its action had suffered heavily following the outbreak of war in Ukraine by Russia, where the bank officiates but from which it will disengage.

For its part, BNP Paribas lost 0.61% to 50.70 euros.

Euronext CAC40