2023-10-11 12:58:14
Published on Oct 11, 2023 at 2:58 p.m. Updated on Oct 11, 2023 at 3:02 p.m.
The Paris Stock Exchange fell slightly this Wednesday at the start of the followingnoon, penalized by the slowdown in LVMH’s quarterly sales and by the stronger than expected rise in producer prices in September in the United States. Prices rose 0.5% month-on-month and 2.2% year-on-year, compared to 0.3% and 1.6% respectively expected by the Bloomberg consensus. A month earlier, prices had risen 0.7% over one month and 1.6% year-on-year.
This indicator illustrates the tenacity of inflation that the Fed has been trying to control for more than a year. Tomorrow’s release of consumer prices will provide valuable new indicators on the possible trajectory of the central bank’s monetary policy, three weeks before its next meeting.
Around 2:50 p.m., the Cac 40 fell 0.25% to 7,144.88 points, in a trading volume of 1.4 billion euros. US futures contracts reduced their progress while the fall in US government bond yields eased.
Although the Fed signaled at its last meeting in September that it expected another tightening this year, many of its members suggested this week that it may not be necessary given given the recent rise in long-term yields to the highest since 2007. But not everyone is of this opinion. Governor Michelle Bowman reiterated in the morning on the sidelines of the IMF-World Bank meetings in Morocco that interest rates may have to rise further to bring inflation back to an acceptable level.
The minutes of the Fed meeting on September 19 and 20 will be closely followed by investors, at 8 p.m. “ The minutes, while dated, should provide some indication of how concerned Fed officials at the time were regarding the risk of excessive tightening, although the language has softened since then. », underlines Michael Hewson at CMC Markets.
LVMH drags the luxury sector into its decline
In corporate news, LVMH shares fell 5.8% and reached their lowest level of the year during the session. The juggernaut of the luxury industry published yesterday evening a 9% increase in its sales in organic data to 19.96 billion euros over the July-September period, a figure almost twice lower than the growth recorded in the second quarter (+17%), due to a decline in demand in several markets following the boom recorded post-Covid. “ The group’s exceptional dynamic was not going to last forever and ‘normalization’ was expected », Commented Berenberg analysts in a note. “ Near-term uncertainty remains over when the sales and margin trend will stabilize and the key debate now is what a ‘new normal’ looks like for 2024 and beyond. »
In the wake of LVMH, the entire sector is affected. Kering and Hermès, which publish their turnover figures on October 24, lost 1.4% and 1% respectively. In other European markets, Moncler, Burberry and Richemont dropped by 1.5% to 4.3%.
Accor announced the launch of a share buyback program worth 400 million euros. The hotel group’s shares gain 1.3%. Maisons du Monde shares fell 7%, Exane BNP Paribas having lowered its advice from “neutral” to “overweight”.
On Wall Street, the German brand of Birkenstock sandals, now worn by all fashionistas, will take its first steps on the stock market with a unit share price set at $46. Birkenstock, controlled by L Catterton and Financière Agache of the Arnault family, is expected to have a valuation of 8.64 billion.
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