(News Bulletin 247) – The CAC 40 ended slightly down on Thursday. The automotive segment was penalized by fears of a price war, while luxury, driven by L’Oréal’s results, contained the market decline.

The Paris Stock Exchange is showing a certain resilience. After moving sharply lower during the session, the CAC 40 ended on a decline limited to 0.14% to 7,538.71 points.

The news on the macroeconomic front is not necessarily encouraging. The US Federal Reserve (Fed) Beige Book, which charts the state of the US economy, showed some worrying signs.

“As for credit conditions, five districts reported tightening of conditions, with one New York respondent indicating that ‘credit standards have tightened significantly for all types of loans’,” Deutsche Bank said.

This deterioration in financing conditions is obviously linked to tensions in the banking sector following the bankruptcy of Silicon Valley Bank (SVB).

Tesla is hurting the automotive sector

This fuels speculation that Fed rate hikes will end soon, or even cuts. “Central banks, and the Fed in particular, are now at risk (…) of excessive tightening, just when data could show that price pressures are easing significantly,” notes Craig Erlam of Oanda.

The problem remains to find the right moment to put an end to these monetary tightening policies. In the United Kingdom, inflation, published on Wednesday, did not slow down as much as hoped, to 10.1% year on year in March, barely less than the 10.4% in February, which casts doubt on the possibility for the Bank of England to end its rate hikes soon.

On the side of values, two contradictory currents clashed. The automobile sector, despite Renault’s satisfactory sales in the first quarter, suffered, the diamond group having lost 8%, and Stellantis 5.4%. These values ​​were weighed down by the fear of a price war on electric vehicles.

“Renault may publish good figures and make reassuring remarks, the market retains Tesla’s aggressive price cuts and relegates the group’s sales and the reassuring dynamics of the Megane E-Tech to the background”, explains Michael Foundoukidis, analyst at Oddo BHF.

Tesla has also published its results for the first quarter, with a plunge in its operating margin, the price cuts combined with cost increases eroding its profitability. What Wall Street does not appreciate, the Tesla action falling by 8.6%.

Sartorius Stedim Biotech fall

Conversely, luxury pulled up the CAC 40, thanks in particular to the good figures of L’Oreal (+1.7%). The company published growth almost twice as high as expected for the first quarter (13% like-for-like), thanks to the good performance of Europe and North America.

North Asia, on the other hand, grew by only 1.9% like-for-like due to significant destocking in January in China. But Nicolas Hieronimus, the chief executive, told analysts the company was back on double-digit growth in February and March in the country.

Hermès took 1.6%, LVMH 1.3% and Kering 0.8%. These luxury securities increasingly look like safe havens for shareholders.

Sartorius Stedim Biotech for its part fell by more than 8.8%, its results suffering from a normalization of demand for its products linked to Covid-19.

Getlink won 2.8% after publishing a 123% jump in revenue, most of which is due to the activity of the Eleclink electrical interconnection, connected since May 2022 in the Channel Tunnel, and which added 230 million euros to revenues for the first three months of the year. But the group’s traditional activities (shuttles for individuals and goods transport trucks, use of the tunnel by rail companies) were also dynamic, with a 23% increase on a like-for-like basis.

Maison du Monde lost 3.3%, penalized by Bryan Garnier & Co, which lowered its advice from “neutral” to “sell”.

On the other markets, the euro took 0.1% against the dollar, to 1.0970 dollar. Oil prices are falling sharply. North Sea Brent for June delivery fell 2.3% to $81.23 a barrel while New York-listed WTI for May fell 2.3% to $77.36 a barrel.