Luxury, bad student? The Paris Stock Exchange fell by 0.50% on Thursday January 13, weighed down by the luxury sector. In the last three places of the CAC 40 were the flagships of French luxury, Kering (-3.61% to 685.90 euros), Hermès (-3.17% to 1,329 euros) and L’Oréal (-2.81% to €388.80). Shortly after came LVMH, which lost 2.64% to 690 euros. While the rest of the markets were satisfied for a while with the latest figures on price trends in the United States.

The flagship CAC 40 index dropped 36.05 points to 7,201.14 points. It finished up 0.75% on Wednesday. The Parisian rating remained in the red throughout the session, unlike its European and American counterparts which evolved in the positive in the middle of the day. According to Frédéric Rollin, investment advisor for Pictet AM, the decline in luxury sector stocks is linked to the sharp drop in the dollar in recent days, “which penalizes major exporters, such as companies such as L’Oréal or LVMH”, heavyweights of the Parisian index. The dollar has indeed lost more than 1.40% of its value against the euro in five days.

Stable indices despite this sectoral trend

This sectoral trend explains why “the CAC 40 behaved a little differently” from other European stock markets on Thursday, adds the analyst. “Apart from that, the indices were stable or in the positive” a good part of the day, reassured by “inflation figures which have ceased to surprise on the rise”, comments Mr. Rollin.

In the United States, consumer prices have, in line with expectations, climbed 7% over the year 2021, recording their strongest rise since June 1982. But in the month of December alone, inflation slowed compared in November, at 0.5% against 0.8%, in particular because the increase in energy prices slowed for the first time since April.

In addition, on Thursday, wholesale prices in December came out below analysts’ expectations: +0.2% compared to November, against +0.4% expected, a marked slowdown. Over the whole of 2021, however, wholesale prices jumped 9.7%, unheard of since this data began to be compiled in 2010.

Faced with these record price increases, the US Federal Reserve (Fed) has already warned that the withdrawal of its exceptional measures to support the economy would be done more quickly than expected.


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