In 2022, the CAC 40 lost 9.5%, its worst performance since 2018, a year in which it decreased by nearly 11%. The Paris market experienced a strong change in trend compared to 2021, which ended with a gain of nearly 29%. Global financial markets were severely disrupted by Russia’s invasion of Ukraine.
The conflict logically led to a sharp increase in risk aversion and a sharp increase in equity market volatility. This deterioration in the geopolitical environment had very significant economic consequences, in particular causing a sharp acceleration in inflation. Ukraine is one of the main exporters of cereals and edible oils and Russia, one of the main exporters of black gold and critical raw materials. The decision of Western countries to reduce their dependence on Russian oil and gas has led to a surge in hydrocarbon prices and, more generally, energy costs, which have increased inflation. The general context was already favorable, as a result of the highly expansionary monetary and fiscal policies put in place to fight Covid. The main central banks responded vigorously to this sharp increase in consumer prices. Over the last 12 months, the Fed has increased its main key rate from a range of 0%/0.25% to 4.25%/4.50%.
The stock markets recovered during the summer as a result of companies resisting better than expected, a trend that continued in the following quarters. Investors also relied on a central bank “pivot” towards a further easing of monetary policy in the second half of 2023 before experiencing a severe setback. At the central bankers' conference in Jackson Hole at the end of August, Fed Chair Jerome Powell made a very offensive speech. He warned that the Fed would continue to lower inflation until the job is done and that the fight would be costly in terms of jobs and economic growth. The autumn return proved to be very difficult for the market (with the CAC 40 posting its lowest point of the year at 5,676 points at the end of September). However, the trend resumed with a sharp rebound, as investors once again put their hopes in less aggressive central banks. This scenario was fueled by lower-than-expected US inflation in November. As in the summer, investors’ hopes were dashed in mid-December. They were surprised by the Fed’s renewed determination, as well as that of the ECB, to continue their rate hikes to fight inflation.
Among the European indices, the DAX 40 index lost more than 12% over the year, penalized by the automotive sector. On the other hand, the FTSE 100 managed to post a positive performance (+0.91%) thanks to the numerous shares linked to commodities and the limited presence of technology companies. In addition, Wall Street had a mixed year. If the Dow Jones index fell in proportions similar to the European stock markets (-9.16%); the Nasdaq Composite significantly underperformed. The index, mainly of technology stocks, fell by 33.57%.
In a difficult context linked to the invasion of Ukraine by Russia and its inflationary and recessionary consequences, the media sector (SXMP) lost 8% in 2022, compared to 7% for the MSCI Europe index, thus reversing the trend in 2021. Advertising agency shares had mixed performances, with a decline in the first half of the year followed by a rebound in the second half. While macroeconomic uncertainty prevailed in 2022, the agencies beat the expectations communicated to the market at the beginning of the year. In this context, Publicis was up very slightly over the year, at +0.4%, consolidating a +45.2% increase in 2021. At the same time, WPP dropped -27% over the year, while U.S. peers saw their performance diverge, with Omnicom gaining 10.6% and Interpublic losing 11.2%.
In the rest of the European media sector, video game companies had a disappointing stock market performance, while the share prices of professional news companies and companies in the music sector (Universal Music Group) were relatively more resilient.
Publicis Groupe’s financial communication is based on the principle of providing precise, transparent, true and fair information on the Groupe’s situation to all financial markets within the framework of the current texts, standards and procedures in France: the Financial Security Law, the IFRS (International Financial Reporting Standards). The Publicis Groupe Investor Relations Department maintains a close, ongoing dialog with both brokerage Company and investment fund analysts. Publicis Groupe’s financial communications with institutional investors is reflected in the organization of meetings in the world’s major financial markets, and by the participation of Groupe representatives at investor conferences.
In 2022, Publicis Groupe met with around 900 institutional investors at roadshows and industry investor conferences.
