The Powell effect weighed on some disappointments in corporate results
After briefly exceeding the 6,300 point threshold for the first time since June 10, the Paris Stock Exchange steps up. The prospect of a less aggressive Fed on interest rates, while well received, has been offset by a very dovish take on certain stock market heavyweights results and the deterioration in economic sentiment in the eurozone. . . The index released by Eurostat fell 4.5 points to 99 in July, the lowest level since February 2021, weighed down by recession fears.
middle of the session, the bedroom 40 stable at 6,256.75 points (-0.02%) after a high of 6,307.03 (+0.78%) with a business volume of 1 billion euros. The contracts future on US indices fell between 0.1% for the Dow Jones and 0.8% for Nasdaq100. Meta Down 6% in pre-market New York. Facebook’s parent company announced last night that it suffered the first drop in its quarterly revenue in its history. Apple and Amazon will release their results after Wall Street closes.
The mega rate hikes behind us?
As expected, the Fed raised its key interest rate by 75 basis points for the second time in a row, bringing it within a range of 2.25% to 2.5%. During his press conference, Jerome Powell showed a determination to fight inflation while attempting to calm expectations of the next monetary tightening. In particular, he pointed out that ” At some point it would be appropriate to slow down ‘ without giving any further details.
Central banks need to consider both price increases and recession risks. For the analysts at JPMorgan, they should therefore continue their monetary tightening cycle this year. But it seems ” increasingly likely that the peak of the rate hike pace is behind us “. Others point out that Jerome Powell’s speech is more ambiguous than it appears, especially since “forward guidance” is no longer relevant.
Mike Wilson, Morgan Stanley’s chief US equity strategist and chief investment officer, cautioned against the temptation to bet on equities despite the rally following the Fed’s decision. When asked by CNBC, he said: ” the market always goes up once the Fed stops raising rates until the recession begins. But he feels it is unlikely that the time lag between the end of the tightening campaign and the recession is significant. In the end it will be a trap ‘ he concludes.
Jerome Powell also pointed out that the next decisions will be taken at meetings, suggesting that a potentially less restrictive approach will depend on economic indicators. In the bond market, the US 10-year bond yield was stable at 2.78%, while in the FX market, the dollar weakened against other currencies, notably the yen. The euro is daring a dip to $1.0191 after a 0.9% jump overnight.
SchneiderElectric and Ipsen in sight, Scor damaged
Investors’ attention now turns to the first estimate of US GDP for the second quarter. The consensus formed by Bloomberg expects growth of 0.5% on an annualized basis, after a 1.6% decline in the first year. In addition, the first data on the development of consumer prices in July in Germany will follow at the beginning of the afternoon.
Schneider Electric Advance of 4.4%. The electronics maker has raised its growth targets for its operating income and revenue for 2022 after releasing robust first-half results.
ArcelorMittal increased by 4.3%. The steel giant may have reported second-quarter net income, down slightly to $3.92 billion, but its free cash flow generation and stock-buying program are attracting positive reviews from analysts, reassured by the company’s financial discipline.
Stellantis estimated at 3.1%. The automaker announced new record results, the margins achieved with its Jeep, Fiat and Peugeot electric vehicles have allowed it to perform well in a context. particularly difficult “.
STMicroelectronics receives 2.9%. The semiconductor maker reported better-than-expected second-quarter results and raised full-year 2022 expectations amid strong demand for its products.
Holy Gobain gains 2.5%. The building materials manufacturer published record operating profit and a double-digit margin at the end of June. At 11%, it rose by 0.3 points within a year. The building materials manufacturer also reiterated its full-year outlook, which is an increase in operating profit at comparable exchange rates compared to 2021.
Kering takes 1.9%. The luxury group reported a 12% increase in sales between April and June on a comparable basis. However, the growth of the flagship brand Gucci is only 4% due to closures and restrictions in China.
ipsen increased by 14.2%. The pharmaceutical company The pharmaceutical company has raised its targets for 2022 after releasing robust half-year results.
Vice versa, score Down 13.4% after a net loss of 239 million euros in the first half compared to a profit of 380 million a year earlier. The drought in Brazil, the war in Ukraine and the ongoing Covid epidemic were particularly detrimental to performance.
airbus Plaice of 5.4%. The planemaker has lowered its aircraft delivery target for 2022 and pushed back its production rate target of 65 aircraft per month for the A320 Family to early 2024 due to difficulties in its supply chain. Airbus now expects to deliver around 700 aircraft this year and not 720. The other goals will be adhered to.
accord falls 7% despite announcing a sharp increase in its second-quarter earnings. But the annual forecasts are said to be “ blunt by analysts.
orange down 3.2%. The incumbent has confirmed that it is targeting an adjusted adjusted gross operating surplus (Ebitdaal) of 2.5% to 3% on a like-for-like basis for 2022, while this indicator rose tentatively in the first half.
Total Energies loses 3.4%. The oil major announced a new share buyback program after posting a jump in earnings in the second quarter of 2022, boosted again by the sharp rise in hydrocarbon prices amid the war in Ukraine.
Crossing gives 3.2%. The distributor said it is accelerating its cost-cutting efforts this year after its adjusted net income fell in the first half. accounts are” blunt with an operating profit at the lower end of the already reduced forecast range, which is being pulled down by Europe, the analysts at JPMorgan summarize.