The Paris Stock Exchange closed this Wednesday session on a stable note (+0.07%, to 6,542.14 points). The Cac 40, which lost up to almost 1% after an opening on the rise, finally gained 0.08%, to 6,542.14 points, as the season for publications by companies of their accounts and/or first quarter revenue.
In France, LVMH was the first of the Cac 40 companies to take stock of its activity last night. The luxury giant, owner of the Louis Vuitton and Dior brands, its main sources of profit, first gained more than 2% on the stock market this morning before doing an about-face (-2.6% at the lowest of the day ), to finally end up slightly up 0.5%. The heavyweight of the French coast reported sales growth of 29% in the first three months of 2022, a much better dynamic than expected by financial analysts.
Adam Cochrane, at Deutsche Bank, points out in particular that the turnover of 18 billion, up 4 billion over one year, is 1.6 billion higher than his estimate. The forecaster notes that LVMH’s activity has not been affected by the war in Ukraine. And when it comes to containment measures in China, the biggest market for luxury players? They only had an impact at the very end of the quarter. The shock, on the other hand, could be more marked in the second quarter. The question of China was at the center of analysts’ questions during the LVMH conference call. In addition, it is feared at Invest Securities, “The second quarter should begin to show signs of a more marked slowdown in an environment where the momentum growth in the global economy is waning. If LVMH is protected from inflation by its pricing power, it nevertheless remains sensitive to economic fluctuations. »
Hermes and Kering, which were also up this morning, ended the session down 1%. The publication by LVMH of its first quarter sales also had an impact on Pernod Ricard (-2.49%) and Remy Cointreau (-4.4%) while, as noted within the investment bank Jefferies, the “Wines & Spirits” division of the world’s number one luxury brand experienced a “smooth start to the year”.
TotalEnergies gained more than 1% supported by oil prices which have started to rise again since yesterday.
Stellantis also finished at the top of the rankings after confirming, at its general meeting, its margin target for this year despite the worsening tensions on raw materials.
On Wall Street, JPMorgan Chase, a component of the Dow Jones, fell 3%. The bank reported a 42% drop in first-quarter profit, hit by a $902 million credit provision and a $524 million loss related to the market slump following the invasion of Ukraine by Russia. However, net banking income exceeded expectations.
Quarterly copies of BlackRock, Fastenal and Delta Airlines are, on the other hand, welcomed with a lot of optimism, which allows the American markets to progress despite the publication showing the historical runaway of producer prices.
Inflation will weigh on Tesco’s profits
The PPI index rose 1.4% last month and posted a record 11.2% year-on-year increase. Excluding food and energy, the increase reached 0.9% over one month and 9.2% over one year, against respectively +0.5% and 8.4% expected by economists. The acceleration observed in “core” data goes against the slowdown observed yesterday for the same component of consumer prices. In the United Kingdom, inflation jumped by 7% over one year in March, unheard of for 30 years.
Across the Channel, the number one British retailer, Tesco, has warned that its profits will fall this year due to inflation.
Against this backdrop of inflation, slowing consumption, tight supplies and risks of gas shortages, Goldman Sachs strategists have lowered their earnings per share estimates for Stoxx 600 companies to +2% this year, against +8% previously. Those of Barclays, for their part, point out that the forecasts of companies take on more importance insofar as investors are focused on prices, margins, supply problems and demand.
In the United States, profits of S&P 500 companies are expected to appreciate by 4.5% over the period, according to FactSet estimates, the smallest increase since the fourth quarter of 2020, in the midst of the coronavirus pandemic. coronavirus.