The Paris stock exchange closed this Wednesday session stable (+0.07% to 6,542.14 points). The Cac 40, which lost close to 1% after opening soaring, eventually gained 0.08% to 6,542.14 points, as a season for corporate publications of their accounts and/or earnings for the first quarter.
In France, LVMH was the first of the Cac 40 companies to take stock of its operations last night. The luxury giant, which owns the Louis Vuitton and Dior brands, the main sources of profit, first gained more than 2% in the stock market this morning before reversing (-2.6% at the low of the day), before finally a slight increase of 0.5%. The French coast heavyweight reported revenue growth of 29% in the first three months of 2022, much better momentum than expected by financial analysts.
In particular, Deutsche Bank’s Adam Cochrane points out that revenue of $18 billion, an increase of $4 billion over a year, is 1.6 billion higher than his estimate. The forecaster notes that LVMH’s activity was not affected by the war in Ukraine† And as for the re-confinement measures in China, the largest market for luxury players? They only had an impact at the end of the quarter. The shock, on the other hand, could be greater in the second quarter. The issue of China was central to analysts’ questions at the LVMH conference. In addition, it is feared at Invest Securities, “The second quarter should begin to show signs of a more pronounced slowdown in an environment where the momentum the growth of the world economy is slowing. If LVMH is protected from inflation by its price power, it remains sensitive to economic fluctuations. †
Hermes and barrier, which also moved up this morning, ended the session at 1%. LVMH’s disclosure of sales in the first quarter also impacted 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 has a “smooth start to the year”.
TotalEnergies got more than 1% supported by the prices of the oil- that have been on the rise since yesterday.
Stellantis also finishes at the top of the leaderboard after having confirmed its margin target at its general meeting for this year despite increasing tensions on commodities.
on Wall Street, JPMorgan Chase, part of the Dow Jones, fell 3%. The bank reported a 42% drop in profits in the first quarter, affected by a $902 million loan loss provision and a $524 million loss related to the market slump after the invasion of Ukraine by Russia† However, net banking income exceeded expectations.
Quarterly copies of black rock† Confirmation and Delta Airlines on the other hand, are welcomed with great optimism, allowing US markets to move forward despite the publication showing the historic boom in producer prices†
Inflation will weigh on Tesco’s profits
The PPI index rose 1.4% last month, posting a record 11.2% year-on-year increase. Excluding food and energy, the increase was 0.9% in a month and 9.2% in a year, against +0.5% and 8.4% respectively expected by economists. The acceleration seen in the “core” data runs counter to the slowdown seen yesterday for the same consumer price component. UK, inflation rose 7% year-on-year in March, the highest in 30 years†
Across the Channel, the UK’s number one retailer, Tesco, warned profits will fall this year due to inflation†
Against this backdrop of inflation, declining consumption, tight inventories and risks of gas shortages, Goldman Sachs strategists have cut their earnings per share for Stoxx 600 companies this year to +2%, from +8% earlier. For their part, Barclays’s point out that corporate forecasts become more important as investors focus on prices, margins, supply issues and demand.
To the UNITED STATESEarnings for S&P 500 companies are expected to rise 4.5% over the period, according to FactSet estimates, the smallest increase since the fourth quarter of 2020, amid the coronavirus pandemic.
