(News Bulletin 247) – It’s failed again. For the sixth consecutive time, the Paris Stock Exchange closed down after US producer prices exceeded expectations. The luxury sector stands out, however, after the robust publication of the giant LVMH.
The good orientation of the luxury sector on the stock market will not have been of any help. The strength of US producer prices for the past month and the renewed tensions on the bond market have reduced to nothing the attempted rebound of the Paris market. The CAC 40 fell back into its bearish to close down 0.25% to 5818.47 points. This is the sixth drop in a row for the Paris star index…
Inflation is once again crystallizing investors’ fears as the producer price index in the United States rose faster than expected. In September, prices appreciated by 0.4% after falling by 0.2% in August. The rise in producer prices suggests that the fight against inflation is far from won, on the eve of the publication of consumer prices again for the month of September.
The markets will also be informed in the evening of the minutes (“the minutes”) of the last meeting of the monetary policy committee of the American Central Bank. It should give some indication to the markets of the future direction of rates before the Fed meeting in early November. “The Federal Reserve notes the strength of the labor market and the persistence of inflation. It seems too early to hope for a change of direction in monetary policy”, notes Frédéric Rollin Investment Strategy Advisor at Pictet AM .
Still on the monetary chapter, investors no longer know how to interpret the contradictory information coming from the other side of the Channel. The Bank of England confirmed on Wednesday that it would end its buyback purchases of Treasury securities on Friday as planned, despite press reports raising hopes of a possible extension of these support measures. The British monetary institution has however specified that a certain number of measures will remain in place beyond this deadline of October 14.
On the bond market, rates are trending up again, the British government’s ten-year borrowing rate has reached a new high since 2008, moving to 4.60%, while the 30-year rate exceeds 5% , approaching its 1998 highs.
LVMH flagship of the CAC 40, Vicat weighed down by energy costs
LVMH ends up 1.9% after the announcement of its third quarter sales. The luxury giant, which kicked off the results season in Paris, published sales close to 20 billion euros in the third quarter and remains “confident in the continuation of growth” despite the economic and geopolitical context. In its wake, Christian Dior gained 2%, Hermès 1.8% while Kering closed close to balance at 445.45 euros.
SMCP, the specialist in “accessible luxury” is also doing well to close at the top of the SRD with a gain of 4.5%.
Vicat, on the other hand, plunged 9.3% at the close, as the cement maker warned that it would not be able to meet its profitability targets in the face of rising energy costs.
Down much of the session, Eutelsat finally closed up a symbolic 0.06% to 8.18 euros. The European satellite operator announced on Wednesday a turnover down 4.5% year on year on a comparable basis in the first quarter of its staggered 2022-2023 financial year. Despite everything, the group confirms all of its objectives for the current year and the following years.