Chapter 849

Falling prices did not mean that the production costs of companies fell. Even because of the rise in labor and industrial raw materials, the production costs of many companies did not fall but rose.

The military orders provided by the United Kingdom and Russia were lower than market expectations, and many industries faced a situation of oversupply. In this context, the days of the processing and manufacturing industries were naturally not good.

In order to survive, everyone had to fight a price war. The companies that reacted quickly were fine. At least they made a lot of money at the beginning of the war last year.

The market fell in the first quarter, but overall, the profits were good. After entering the second quarter, it was a tragedy. A bunch of guys who fantasized about making money from the war joined in, further intensifying the market competition.

It was impossible to exit. The funds had become machinery, equipment, and factories. At this time, there was no way to find a buyer.

Relatively speaking, the least affected were the British companies. The government prioritized domestic procurement, and invisibly occupied the biggest advantage.

The most miserable among the big countries was undoubtedly the French industry and commerce. The Government of the United Kingdom could not grab the orders, and Russia's orders faced Austria's competition.

The Government of France was willing to issue bonds to the Russians in order to compete for the market. With francs, they would naturally purchase French goods.

Even so, the French industry and commerce could only get a portion of the daily necessities orders. The most profitable military field could not compete with Austria.

It was not that the French companies did not work hard, nor was it that the Russians treated them differently. The main reason was that the military system was different.

The caliber of Russian and Austrian weapons was the same. They could be used directly after buying them, and logistics and maintenance were very convenient.

If they bought French products, not only would the soldiers need to be re-trained, but logistics and maintenance would also be a big problem. During the war, the Tsarist government must consider practicality.

…

May 24, 1890, was another day when listed companies announced their financial reports. The Paris Stock Exchange was already crowded.

From everyone's talking and laughing expressions, it was clear that everyone was in a good mood. The outbreak of the Anglo-Russian war, which they had been looking forward to, was now the time to harvest.

From the outbreak of the Anglo-Russian war to the present, the average share price of the Paris stock market rose as high as 23.7%. The foreign trade sector rose more than 57% at one point, and the share price doubled.

Based on the rich returns during the Prussian war, everyone had high expectations for the Anglo-Russian war. Especially the financial report of the last quarter of last year, it proved this point.

As for the price decline, unfortunately, the French people did not feel it. Because of the tariff barrier, French prices were relatively less affected by the international market.

In this day and age, news traveled slowly. Capitalists were shrewd. The export earnings were not as good as expected, and the backlog of products was serious. Naturally, this news had to be kept strictly confidential.

If the news was leaked in advance, who would take over for them? There was almost no market regulation these years. After the sales problems in the first quarter, people started to sell their shares.

Under the constant stream of good news, ordinary investors had no idea that a crisis was approaching.

In front of the exchange, a plump middle-aged man was reading a financial newspaper with great interest.

"Amick," Amick said with regret.

The fat middle-aged man, Amix, replied with slight regret, "The financial newspaper, Hex Textile Factory is negotiating with the Russians. If there are no surprises, it will be another 30 million franc order!

Unfortunately, I'm timid. A few days ago, I heard that the Hex Textile Factory had a serious backlog of products, so I withdrew half of them and bought the Feidolon Machinery Factory instead.

The person comforted him. "It's okay. The Fedoron Machinery Factory is not bad either. The downstream market is so good, and companies are expanding production. How can the performance of the upstream equipment manufacturers be bad? "

This was common sense. Once the industry was good, the companies in the entire industry chain would benefit.

Amix shook his head. It was true that the upstream companies would benefit. But the increase in stock prices was not as large as the companies involved.

It was a time of war, and any industry related to strategic materials was good. How could there be a large backlog of products?

Even if there was a backlog, it was a company hoarding! Amick asked the family of the guy who passed the news.

Looking at the smiling man, Amick asked tentatively, "Anthony, I remember you bought this stock too. You must have had a good harvest this time."

Anthony smiled. "I just happened to catch it. I didn't buy much, just 20,000 shares.

But Amick, you're too timid. The most important thing in our industry is mentality. We need to analyze the overall market. There's no need to pay attention to gossip.

Capitalists are not fools. If there was a backlog, they would have laid off and reduced production. Now, the streets are filled with job ads! "

Hearing his friend's analysis, Amick's face turned even uglier. It was as if he had lost another 100 million.

Judging the operation of a company from the labor market was the most basic ability of an ordinary investor. Even a stock market novice would know this.

Especially for the manufacturing industry, when companies were recruiting, it was definitely the best time for the market.

Anthony seemed to realize that he had said too much, so he hurriedly said, "Alright, Amick. Let's wait for the company to patiently announce the financial report. It's just a matter of how much.

Maybe the performance of the machinery factory will be explosive, and the stock price will rise even higher than the textile factory. You should know that recently, there have been a lot of new factories popping up, and they all need to purchase equipment. "

As soon as he said that, someone shouted again, "That's impossible!"

"This can't be true, they must be lying to me, right?"

…

As the financial reports of companies were released, similar voices began to ring out.

Amick and Anthony, who were still on the outskirts of the crowd, realized something was wrong. They hurriedly squeezed into the exchange.

However, it was all too late. After the initial panic, the shareholders who had received the financial report had already begun to sell their stocks.

The market was full of selling orders, and there were no buying orders. All the investors present knew that the market was about to be destroyed.

Seeing that the situation was out of control, a group of well-prepared police officers appeared in the market and began to maintain order.

By the end of the day, the Paris stock market had fallen by 8.6%, and some stocks were cut in half.

This was just the beginning. The companies that released their financial reports today were only a small portion. The rest of the companies would release their financial reports in the following week.

If most of the companies failed to meet market expectations, it would be a real disaster. This was just an appetizer.

It was just that this appetizer destroyed half of the Paris stock market's gains over the past six months.