Paris: masterful counterpoint, but less stringent than at WStreet – 05/05/2022 at 20:02

BUYING POINT-Few changes in Europe pending the Fed (update) - 05/04/2022 at 08:29

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(CercleFinance.com) – After spending the day in positive territory, gaining up to 2.5%, the Parisian index fell to red around 5 pm, before ending the session with a loss of 0.43%, to 6,368 points , after falling -200 points to 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 offsets of the year … and it is much worse on Wall Street.

The downside is also on the E-Stoxx50 (-0.9%) and Frankfurt (-0.6%), while London is reducing the loss (+ 0.2%).

Across the Atlantic, the indexes fell sharply: they did not improve in the middle of the session by up to -1,100 points on the Dow Jones (-3.3%), -3.7% on the S & P500 and -5.2% on the Nasdaq Composite (below 12,300 Pts), after signing one of the strongest gains of the 21st century the day before the Fed decision (+ 3% for the S & P500, + 3.2% for the Nasdaq Composite).

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

This morning, markets welcomed the somewhat unbridled (and inconsistent?) Claim that the Fed would not exceed a half-point increase in the key interest rate, regardless of the inflation rate, with some of Jerome Powell’s colleagues reporting and supported a “shock strategy” of +75 basis points.

Another change in monetary policy, the central bank said it would start reducing its giant balance sheet by -47.5 billion dollars from next month, before reaching -90 billion dollars, or 1% of the amount owed. today amounts to almost $ 9,000 billion.

In a press conference, Jerome Powell, president of the foundation, assured the Americans that the Fed would do everything possible to quickly bring inflation under control and aim for a “soft” landing for the economy. low tide of inflation without the onset of the recession.

However, bond markets are at least skeptical: the yield on 10-year US government bonds rose rapidly from 2.92% around 20:40 to 2.965% this morning, then to 3.04% this afternoon, at the highest level from 2018.

On the contrary, our OATs are also spectacular (from -9 points to +2.5 points at 1.536%) and from -7 points in the Bands to +3 points at 1.011%.

With the Fed meeting now over, investors were surprised to learn that the Bank of England’s decision to raise its key interest rate from 0.75% to 1.00% (also trapped between galloping inflation and deterioration business prospects): this seems insufficient and the pound falls -2% against the dollar to 1.237.

On the “macroeconomic” front, the program included data on industrial production in France. In March, it declined in manufacturing (−0.3% after −0.9%) as well as in the industry as a whole (−0.5% after −1.2%), according to data corrected for seasonal and working days (CVS-CJO) from INSEE.

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

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

There were also data in the United States and in particular non-agricultural productivity: it fell by -7.5% in the United States in the first quarter of 2022 on an annual basis, according to a preliminary estimate from the Department of Labor. fall much larger than economists expected on average (-4%).

This drop reflects a 2.4% drop in production, although the number of working hours increased by 5.5%. Combined with an increase of 3.2% in hourly wages, it leads to an increase of 11.6% in labor costs per unit of product.

The number of weekly registrations for unemployment benefits rose by +19,000 in the week of April 25 in the United States, reaching 200,000, up from 181,000 a week earlier: it was a 50-year low.

The four-week moving average is 188,000, up 8,000 from last week’s revised level.

Finally, in the week of April 18, the number of people receiving regular benefits amounted to 1,384,000, a decrease of 19,000 compared to the number of the previous week.

The dollar is not affected much and remains stable for 24 hours at $ 1.0530 (compared to 1.0640 on Wednesday afternoon) and the real half surprise of the day is the continuation of the oil increase to $ 112 in London (Brent), which supports Total Energies with + 2.2%, thanks to which the CAC40 remains positive.

In the news of the French companies, Societe Generale publishes the net income, the underlying share of the group increased by 21.3% to 1.57 billion euros for the first quarter of 2022, as well as the gross income of the underlying operations increased by 37 , 6% to 2.96 billion euros.

Crédit Agricole SA says it has chosen a “prudent” forecast for its exposure to Russia and states in a press release that in the first three months of the year, net income, the group’s underlying share, fell 19% to 756 millions of euros. .

Legrand reveals the group’s net income share increased by 13.3% for the first quarter of 2022, to 258 million euros, despite the adjusted operating margin before the acquisitions (in the scope of 2021) reduced by 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 in one year, as well as an operating result of -350 million, but a positive EBITDA of 221 million.

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