Paris: Terrible weekly deviation from S&P500, E/$ -1.5% – 03/04/2022 at 20:10

( – The Paris stock market ended the day’s session down 4.97% at 6,061 points, posting its biggest daily decline since the start of the Ukraine conflict and recording a weekly decline of nearly 10%.

The situation is hardly more enviable in Frankfurt (-4.9%) and London (-3.5%), while the E-Stoxx50 gives 4.9%… but it’s still anecdotal compared to -6. 25% of the Milan stock market, which has completely cracked. and fell -11.5% in a week.

On Wall Street, American indices are also in the red, but their decline is almost anecdotal: -1% for the S&P 500, -1.1% for the Dow Jones and -1.3% for the Nasdaq (revenue – 2.2%).

The S&P500 lost -1.5% over the week against -10.5% for the E-Stoxx50.

One of the ‘facts of the day’ is the euro’s fall of -1.3% to a new yearly low of 1.0918 against the US dollar, almost -3.3% in the last week (and -4% since January 1) and against parity with Swiss. Frank, which added 1.3% to 1.001/E.

The courses are being punished by rising tensions in Ukraine: Last night Zaporizhzhya Nuclear Power Plant, Europe’s largest, was hit by Russian fire, raising fears of a possible leak of radioactive substances … but only the administrative building was damaged and the fire was quickly brought under control.

The episode confirms the scenario, voiced yesterday by Emmanuel Macron after a telephone interview with Vladimir Putin, according to which “the worst could be ahead”, uncertainty that fuels investor reluctance.

A sign of market tension is that the VIX index (linked to the S&P500), which measures market volatility, rose almost 10% to 33. Recall that markets above 20 are generally considered “nervous”.

But the decline in the indices remains “ordered”, there are no “panic selling” as in March 2020 with sessions at -7%.

The high point of the week, NFP, is eclipsed by “geopolitics”: 678,000 jobs created in the US against an expected 400,000: “better than expected” prevails in the previous 2 months. The creation of jobs in December was revised from +510,000 to +588,000, in January from +467,000 to 481,000, i.е. +92 000 total.

Another “better than expected” figure: hourly wages remained unchanged instead of the expected +0.5%.

The labor force participation rate rose from 62.2% to 62.3%, while the unemployment rate fell symmetrically from -0.1% to 3.8%.

Charles Evans (Chicago FED) welcomes these solid numbers and predicts that the US labor market will remain vigorous: the FED’s plans to raise interest rates remain, given the current inflationary outlook.

Eurozone retail sales rebounded less than expected in January compared to the previous month, data released by Eurostat on Friday showed.

The European Union Statistics Office estimates that seasonally adjusted retail sales in the euro area increased by 0.2%.

By comparison, economists had expected them to rise by an average of 1.5%.

The fall in December, after the appearance of the Omicron option, was revised to -2.7%, against -3% in the first estimate.

On an annualized basis, i.e. compared to January 2021, the calendar adjusted retail sales index increased by 7.8% in January in the euro area, the increase is mainly due to an increase in fuel purchases (+12.7%).

Fixed income markets are playing a safe haven, with OAT and Bunds down 8 points to 0.416% on OAT, and US Treasuries shed 14 points to 1.706%.

Oil resumes growth from +4% to +4.5% for Brent ($115) and WTI ($112.7), not to mention gas, which in Europe rose by +6.5% (i.e. +1000 % in 12 months!) which amplifies the market stress.

Banks are suffering on the news of French stocks and Societe Generale (-10%) falls sharply, BNP Paribas loses -7%. The automotive sector continues to suffer, with Stellantis down 7.6% and its former subsidiary Faurecia down 5.7%. Renault (-4.4%) also lost -23.4% for the week.

Only Thales floats in CAC with +0.8%.

Manitou publishes group net income of €87 million for 2021, up from €40 million in 2020, and current operating margin improved by 1.2 points to 6.6%, on a business figure of €1.87 billion, up 18% more than in a comparable basis.

Dassault Aviation says its 2021 net income doubled to €605 million and its adjusted operating margin increased by 2.5 points to 7.3%, thanks in part to a decline in self-financed research and development. The aircraft manufacturer’s turnover amounted to 7.23 billion euros, an increase of almost 32%, and the volume of orders amounted to 12.08 billion against 3.46 billion last year.

Finally, Michelin announces in a press release that it is facing significant challenges in terms of logistics and transport to supply its factories and deliver to its customers due to the severe crisis that is currently unfolding in Ukraine. In order to streamline its operations and adapt flow management, the Group has decided to shut down production at some of its plants in Europe for a few days over the next few weeks.