Cac 40: Galloping inflation in the United States and the approach of results tense the markets

(BFM Bourse) – Stock markets, such as the Paris Stock Exchange, are preparing for the impact of the publication of the consumer price index in the United States, announced as “extraordinarily high” in March by the White House.

Once again, investors are concerned about the pitfalls approach that they have long been unwilling to see, or at least largely put into perspective until recently, when indices were already in evidence. Remember that the ACC 40 were on the brink of an all-time high earlier in the year when inflation was already reaching levels across the Atlantic not seen for several decades and only the sound of boots in Russia announcing the invasion actually triggered a correction from the end of January). But the risk now looks imminent as companies will begin to give concrete indications of their performance in early 2022 and, for some of them, will specify their prospects by integrating the effect of cost increases into their targets.

It’s a sure bet we’ll talk pricing power to try to select those capable of absorbing the impact by transmitting the mistigri to their clients. While the White House has hinted that March inflation will be worse than expected, and quarterly releases begin tonight in Paris with LVMHthe three-color flagship index gave up 0.86% 6,499.63 points around 12:00 p.m.

In February, the US Institute of Statistics already showed the consumer price index at 7.9% for a year, the highest inflation recorded since January 1982 (when you were listening to Don’t You Want Me by the Human League on your transistor or maybe Get Down On Es from Kool and the Gang). But obviously, we can expect even worse for March, with the White House spokeswoman having mentioned an “extraordinarily high” level as the latest increases linked to oil and gas will be integrated into the panel this time. The bets are open to know if (when?) the 10% mark will be touched… Verdict this Tuesday.

interest rate hike

The inflationary factor has two main consequences. For one thing, it translates into a steady rise in bond yields (the ten-year Treasury yield is at its highest level since December 2018, and its German equivalent, the Bund, at its highest level). since July 2015), and this makes risk-free assets more competitive, especially against very expensive growth stocks. On the other hand, this will undoubtedly be a point of attention in the discourse of companies, which will have to convince, firstly, that they are capable of transferring the increase in their costs to their prices and, secondly, that this do not discourage consumers. Luxury is famous for having this ability to an unparalleled degree: investors are obviously not too concerned about LVMH and Hermès, which obtained better results (-0.1% and +0.2%), but Dried less convincing at the moment (-1.7%).

On the health side, bioMérieux has already reported its business performance in the first quarter, which reveals as expected a drop in activity linked to the ongoing “endemization” of Covid (synonymous with slowdown in the demand for tests). The title lost 5.8%.

Within the producers of raw materials, metalheads stand out, in particular Eramet (+3.8%) and ArcelorMittal (+1.4%), as well as the oil service companies Maurel & Prom (+4.2%) and CGG (+3.7%) while the giant Total Energies remains below 0.9%. At the same time, the course of Brent it rose 3.07% to $101.50.

Among the rare rises of the moment is biotechnology Poxel (+5.6%) after a regulatory step in the United States for a rare disease treatment project, while the company hopes to find the necessary new financing soon.

In the foreign exchange market theeuro it fell 0.13% to $1.0872.

Guillaume Bayre – ©2022 BFM Bourse

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