While waiting for the Fed’s news, releases from LVMH, Alphabet and Microsoft are reassuring
The Paris Stock Exchange is heading for a hesitant open ahead of the much-anticipated Federal Reserve policy decision. However, good quarterly results from Microsoft and Alphabet have eased fears somewhat profit warning from Walmart, with both stocks gaining in aftermarket trade. The contracts future US indices are also rising after Wall Street’s decline on Tuesday.
The US Federal Reserve is preparing to hike interest rates by 75 basis points in the evening to stem inflation, which topped 9% a year in June, but the key will lie in Jerome Powell’s message on what’s next. Indeed, the question is whether the Fed chair will confirm or refute the observed doldrums in forecasting a year-end fed funds rate of 3.4% ahead of a slowdown in 2023 to revive an economy at risk exposed to recession is forecast .
Return to near-neutral levels
” Fed officials were able to briefly consider further tightening in June after reports of another hike in prices, but with inflation expectations declining and recent signs pointing to a slowdown in activity, we expect another 75 basis point rate hike (…). As this would bring the Fed’s interest rate target back to somewhere between 2.25% and 2.5%, a level very close to neutrality, we expect the Fed to then pick up the pace of its tightening with a 50% hike basis points in September will decrease sums up Paul Ashworth, chief economist for North America at Capital Economics.
The downward revision of the IMF’s growth forecast for the global economy to 3.2% from 3.6% in April did not escape the attention of Fed officials, who, like those of other central banks, were aware that “forward guidance” was now a matter that time is past considering that unchecked expectations would ruin all their efforts to navigate between inflation and recession.
LVMH confident Michelin hit by Russia
Danone revised upwards its full-year sales guidance after second-quarter sales beat expectations on price hikes.
LVMH reported a 28% annualized sales increase for the first half, citing strong year-to-date gains in Europe and the United States. Without making any number forecasts, the group is very confident for the rest of the year.
Michelin reported lower net income for the first half and lowered the outlook for its main markets due to the fallout from the war in Ukraine and health restrictions in China.
Eurofins Scientific increased its targets for 2022, emboldened by the achievement of record sales in the first half.
world line reported organic revenue growth of 12.6% in the first half. The outlook is confirmed for 2022 and 2024.
Crossing, Kering and Holy Gobain will publish their quarterly reports after the close of trading.
