Federal Reserve, which is not too “hawk”, and Cac 40 restarted, Airbus takes off, market news

The Paris Stock Exchange eliminated losses from the previous day due to solid corporate publications, but primarily due to rising interest rates in line with Fed expectations. The US Federal Reserve was also less aggressive than expected in the future.

European stock markets this year have suffered from fears of tight monetary policy, rapid inflation, the war in Ukraine, and the risk of a slowdown in the Chinese economy associated with the government’s policy of “zero Covid”. This was reflected, in particular, this morning in the decline in the PMI Caixin services index, which fell to 36.2 points last month, the lowest level since February 2020. A value below 50 indicates a reduction in “activity”.

Mid-session, Bedroom 40 increased by 1.73% to 6506.03 points with a business volume of 1.2 billion euros. Contracts future In June, US indices fell 0.4% -0.7%. On Wednesday, the S&P 500 ended, however, with an increase of 3%, the most noticeable since May 2020, while the Nasdaq Composite received 3.2%, which is the best figure since March 16.

There is still no increase of 75 basis points

The Fed, as expected, announced last night the first increase in the Fed’s rate by 50 basis points since 2000, to bring it between 0.75% and 1%. It also announced the launch of a process to reduce its balance sheet by more than $ 9,000 billion to $ 47.5 billion a month for three months and then double the amount to $ 95 billion. The tone of the press release, almost in line with March, is also less “hawkish” than one might fear, thus dispelling fears of a significant rate hike.

During his press conference, Jerome Powell said that the Monetary Policy Committee plans to raise rates by 50 basis points at its next two meetings, in June and July, but that he ” did not actively consider ┬╗Increase by 75 basis points. At the same time he specified that in case of increase of the rate ” necessary, we do not hesitate to apply them “.

The fact remains that at the end of the year the rate on Fed funds should increase to about 2% or even more. And that could hurt U.S. stocks, especially technology and growth stocks, as the Nasdaq Composite has lost 17% since the beginning of the year.

Airbus and Arkema have received recognition

Airbus jumped by 6.4%. The aircraft manufacturer has maintained its forecast for fiscal year 2022, and its financial results exceeded expectations by the end of March. The group also announced that it is preparing to increase the monthly production of the A320 family to 75 by 2025.

Perfectly rose by 2.4%. The electrical equipment manufacturer confirmed its financial goals for 2022 by publishing reports that exceeded analysts’ forecasts for the first quarter, earning a net profit of 258.3 million euros, or 13.3%. After him, Schneider-Electric gaining 2.3%.

ArcelorMittal advance of 2.9%. In the first quarter, the metallurgical producer improved its results, in particular, due to higher prices. But the group warned that a slight decline in world steel consumption could be expected this year.

Stellantis increases by 1.8%. The automaker reported a 12% increase in turnover to 41.5 billion euros in the first quarter. The Reuters consensus expected 36.9 billion euros. In the current financial year, the Group confirms that it expects double-digit adjusted operating margins and positive cash flow.

Societe Generale earn 2%. Despite the uncertainty surrounding the war in Ukraine, the bank reported higher-than-expected profits in the first quarter. The share of the bank’s net profit reached 842 million euros against 814 million a year earlier. According to the FactSet consensus, analysts expected an average quarterly net profit of 337 million euros.

The biggest drop is in Cac 40, Agricultural credit loses 2.8%. The Green Bank recorded a 47.2% drop in net income to 552 million euros in the first quarter after recording more than half a billion euros in reserves on its accounts related to its risks in Russia and Ukraine.

Excluding the flagship index, Archema gaining 7.1%. The Specialized Chemicals Group raised its annual gross operating income (EBITDA) forecast for its specialty unit after publishing reliable first-quarter results, despite high inflation for raw materials and energy.