The week of all dangers is open for Cac 40 companies, with around thirty results as of June 30 unveiled by Friday. Publications that come after a start to the year marked by an inexorable price spike, which is putting companies’ margins to the test. In this context, companies must, as much as possible, increase their prices to limit the impact of inflation. The monetary tightening resulting from this phenomenon, particularly in the euro zone and the United States, raises fears of an economic recession which would inevitably affect business growth.
Michelin, Dassault Systèmes and LVMH on the grill, before Alphabet and Microsoft
The first publications will begin on Tuesday, with first of all Michelin. The automotive landscape is currently weakened by ” the rise of recession signals, geopolitical instability and the resurgence of Covid-19 cases explained Barclays analysts in a note in early July. The world leader in tires was able to preserve its growth in the first quarter, by increasing its prices. For the quarter that has just ended, the Bloomberg consensus anticipates a 17.7% increase in turnover over one year, to 6.7 billion euros. If the estimates are confirmed, half-yearly sales would settle just above 12 billion euros.
In the luxury sector, the buying fever of tourists in Europe could stimulate the group’s half-year billings LVMH, despite a degraded environment in China. The market will also scrutinize the half-year accounts of Dassault Systems. After a first quarter that exceeded expectations, the computer-aided design and manufacturing software publisher had the luxury of raising its annual operating margin targets to more than 33%. The momentum should continue in the second quarter, with half-yearly sales estimated at 2.65 billion euros (+16% in one year). The table below summarizes other major company publications.
Internationally, after a first quarter below expectations, the parent company of Google, Alphabet Inc. will release its second quarter results after the close of Wall Street. A post that comes after the Snap shock that caused Meta Platforms, owner of Facebook, Alphabet, and other companies that rely on online advertising revenue to lose more than $80 billion in combined market capitalization on Thursday last. Over the April-June period, Alphabet’s turnover is expected to be 58 billion dollars (Bloomberg consensus), a decline of 6% over one year. The digital giant Microsoft, whose financial year is delayed, will publish its accounts for the fourth quarter also after closing. The three companies of the Dow Jones 3M, Coca Colaand Visa will release their second quarter results, as will UBS and UPS.
The IMF could once again downgrade its forecasts
On the macroeconomic front, investors will follow, at 3 p.m., the new forecasts of the International Monetary Fund, while a further decline in growth prospects is to be expected. Last April, the forecast had already been reduced from 4.4% to 3.6% and should fall again in July between 2.5% and 3%.
In the United States, inflation and rate hikes are hurting consumer confidence. The indicator of Conference Board should fall again from 98.7 in June to 96.9 in July. This degraded economic environment should also result in “ the residential market, which is experiencing a sharp correctionexplain analysts at Oddo BHF. Prices are reacting with a delay (the latest published figures relate to the period from March to May) but given the tightening of borrowing conditions, they will necessarily calm down “. The index FHFA, which measures the change in house prices across the Atlantic, is thus expected to grow by 1.5% over one month, in May, against 1.6% in April. Another sign of slowdown sales of new homes should go from 696,000 to 661,000 between May and June, at an annualized rate.
On the Old Continent, the ministers of the European Union will meet on the subject of the Russian gas crisis.