(More Bank) – The CAC 40 index ended the year 2018 on a decline of 10.95%, experiencing a severe reversal of fortune after having risen by 9.26% in 2017. We must go back to 2011 to find a more poor performance, the best known Parisian index had lost nearly 17%. Elsewhere in Europe, performance is also poor, -12.5% for the FTSE 100 or worse, -18.3% for the Dax 30.
Stock markets had a volatile start to the year, but reached a high in May, with the CAC 40 surpassing the 5600 points at the end of this month. Most of the losses were recorded at the end of the year, with a bearish acceleration in early October due to fears related to the impact of the Sino-US trade war. A new wave of releases hit the stock markets in early December because of worries about the global economy.
Wall Street, which until then had resisted better, cracked in late December. The S & P 500 now loses nearly 7% over the year, despite the rebound on December 26th and 27th, the administration's shutdown and Donald Trump's criticism of the Fed having defeated the resilience of US stock markets.
The big winners
– Safran (aircraft engines, safety equipment, weapons): + 22.69% to 105.40 euros since January 1st. The group "has digested its acquisition of Zodiac Aerospace" with "good synergies", it has a "good visibility on its backlog" and "is able to pass price increases," decrypts Yann Azuelos. It enjoys a buoyant market with strong aeronautical orders.
– Dassault Systèmes (industrial software, 3D drawing): + 17.06% to 103.70 euros. "Management has a very good strategic vision", acquisitions are "very well targeted", their distribution chain and their net cash are "super strong". The group "knew not to be only sensitive to a single industrial player", it is very present in the automobile but also in the aeronautics.
– Kering (luxury): + 12.60% to 411.60 euros. Kering refocused last year on its Luxury business by selling the sports equipment manufacturer Puma. The title benefits from the international influence of its brands (Gucci, Saint Laurent, Bottega Veneta or Balenciaga) and sales that came out above expectations in the third quarter. Even in mainland China, Kering posted in the third quarter "the strongest growth in the year 2018 for its three major brands."
– Peugeot (automobile): + 9.97% to 18.65 euros. The only exception to a sector that was globally affected by the trade war, the group managed to take advantage of a solid performance in 2018, marked notably by the turnaround of Opel-Vauxhall.
– L'Oréal (cosmetics): + 8.79% to 201.20 euros since January 1st. The title "darling of the French surprised in 2018" because despite the slowdown in China, he managed to progress in this market. The group has "well positioned its product lines", it is "present on ethnic products and the aging of the population". "A unique brand", with "super management and a policy of dividend redistribution", according to Mr. Azuelos.
The big losers
– Valeo (automotive equipment supplier): the stock has since January 1 the largest decline in the CAC 40 (-59.03% to 25.51 euros) and is the smallest capitalization in the index. The value – one of the best performers in the CAC in 2017 – has been shaken by the trade war, rising raw materials and poor results. The automotive supplier suffered directly from the descent into hell of manufacturers. In addition, it was penalized by a lowering of its annual objectives in July. The title then went down, losing 50% of its value.
– Atos (IT): the title, which had reached in October 2017 a peak around 130 euros, lost 41.10% to 71.48 euros since January 1. This summer, "an accounting mismatch has worried investors" and brought down the price. The group also published "disappointing results" and revised downwards in October its growth and profitability forecast for 2018. Among its weaknesses, its "geographical positioning, its dependence on external growth" but also "strong competition "Says Azuelos.
– BNP Paribas (bank): -36.59% to 39.48 euros since January 1st. The banking group suffered mainly from its exposure to the Italian banking sector with the BNL bank, bought back in 2000.
– Saint-Gobain (construction / innovative materials): -39.57% to 29.17 euros. The stock was put under pressure by "disappointing construction figures, strike effects that delayed some contracts, the situation in Brazil and a strong competitive environment".
– Societe Generale (bank): -35.38% to 27.82 euros. The group suffered, along with the rest of the rising interest rate sector and a generally unfavorable political environment.
Gold is waiting for its time
(More Bank) The ounce of gold has continued to grow today, gaining 0.18% to $ 1,285.30, a level he had not known for more than 6 months. The yellow metal has returned to favor in recent weeks, regaining its safe haven status in an uncertain economic and stock market context. The shutdown of the US administration and Donald Trump's criticism of the Fed fueled investors' fears, not to mention the resignation of US Secretary of Defense James Mattis. However, over the year, the precious metal is down more than 2%, its first annual loss since 2015.
A difficult 2018 year for raw materials.
(More Bank) The Bloomberg-measured Commodity Index closed on a 12% year-on-year decline after reaching its lowest level since April 2016 this month. It's the seventh year it's down on the last 11 years. Base metals have suffered from many signs of a slowdown in the global economy and fears over the impact of the US-China trade war on the economy. As a result, the price of a barrel of Brent has an annual loss of 19% (-20% for the barrel of WTI). The copper has abandoned, him, 18%.
On the foreign exchange market finally, the euro dropped this year 4.6% to 1.1454 dollar. The European currency was penalized by investors' renewed interest in the greenback. Attention that has been motivated by the normalization of the Fed's monetary policy and the strength of the US economy. The central bank raised its rates four times in 2018, strengthening the interest rate differential between the United States and its main trading partners.