2024-01-01 12:15:36
For Western financial centers, 2023 will remain an excellent vintage. The CAC 40, the flagship index of the Paris Stock Exchange, gained 16.5% over the year, its third best performance since 2014. In 2022, it lost nearly 10%, against the backdrop of the war in Ukraine. , inflation and soaring energy prices. In Frankfurt, the Dax index shows an increase of 20%. The Milan Stock Exchange gains 28%, that of Madrid 21%.
In Japan, the Nikkei index rose by 28%, something not seen since 2013. In the United States, it is also time to celebrate. The S&P 500 index increased by 24% and the Nasdaq, which brings together technology stocks, by 43%. The only downside is the Chinese stock markets, which fell by more than 11%, marking their third consecutive year of decline, due to a much slower recovery than expected in the economy after the period of Covid.
Investors scrutinize monetary policies
This good performance of the stock markets may seem surprising. The war in Ukraine is still there and now there is a conflict in the Middle East. Inflation is falling but still remains very high and, above all, economic activity continues to slow down. Difficult to understand.
«Investors see the glass half full: everything that is bad for growth is good for falling rates. And everything that is good for the fall in rates is good for liquidity and therefore for the stock market. » explains Gauthier Maës, of the management company Meilleurtaux Placement.
The year 2023 was still a rollercoaster ride for the financial markets, with a total of eight positive months and four negative ones. Boosted by the prospects of China’s reopening and then by the new perspectives offered by artificial intelligence, world stock markets rose until the end of spring, despite the scare caused in March by the bankruptcies of regional American banks.
The summer proved more difficult, with the prospect of further interest rate hikes to combat inflation. But the prospect of a faster decline than expected in the rise in prices and a more accommodating speech from central bankers, even suggesting an easing of the cost of money from the first quarter of 2024, were enough to bring confidence back to the financial centers which ended the year with a bang.
Decline in inflation and the bond market
In the United States, inflation reached 3.1% at an annual rate in November, far from its ceiling at 9.1% in June 2022. In the euro zone, it fell to 2.4% in November, against a high of 10.7% reached in October 2022.
In the process, government borrowing declined. The American “10-year” rose from 5% in October to 3.8% at the end of December. Over the same period, in France, that of the 10-year OAT fell from 3.5% to 2.5%.
In the United States, economic growth remains solid, showing an increase rate of almost 5% year-on-year in the third quarter. American households continue to consume and fiscal policy is still expansionary. All of these elements are boosting investor morale, as are the results of large companies, which are posting record levels of profitability.
The tops and flops of the Paris Stock Exchange
This is the case, for example, of Stellantis, born in 2021 from the merger of Peugeot-Citroën (PSA) and Fiat-Chrysler (FCA). The manufacturer with 14 brands published a record net profit of 11 billion euros in the first half (+ 37% over one year), with a strong operating margin, boosted by the high prices of its vehicles. Its shares soared by 59% over the year and posted the strongest growth on the Paris Stock Exchange for the year 2023.
It is joined on the podium by Saint-Gobain, whose shares soared by 46%. Over three years, the increase even reached 73%, boosted in particular by the energy renovation of buildings. In third place is the advertising giant Publicis (+ 41%), ahead of Schneider Electric (+ 39%).
In total, twelve groups grew by more than 30% over the year, but six companies showed a stock market performance at half mast. The railway champion Alstom, weighed down by commercial and financial difficulties, lost more than 46% of its stock market value over the year. Teleperformance, the call center specialist, also had another difficult year, falling 41%.
Kering lost 16%, a rare luxury stock having suffered significant disenchantment from investors. For its part, LVMH grew by 8%, penalized in particular by the poor health of the Chinese economy. Bernard Arnault’s group remains the largest capitalization in Paris (368 billion euros), ahead of L’Oréal (+ 35% over the year) and Hermès (+ 33%).
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