The Paris Stock Exchange should backtrack at the opening, after its rebound of more than 2.5% on Friday, the figures published overnight not being likely to find new catalysts in the equity markets despite a good end of session in New York. Half an hour before the first exchanges, future contracts suggest a decline of around half a percentage point of the Cac 40.
Unsurprisingly, the health restriction measures deployed by China to stem the Covid epidemic weighed on economic activity. In April, retail sales fell 11.1% year on year, their largest decline since March 2020, official statistics showed on Monday. This is much more than the drop of 6.1% that was expected by the consensus and that of 3.5% in March. Industrial production for its part declined by 2.9% on an annual basis, after growth of 5% the previous month and compared to the anticipation of a slight increase of 0.4%. The unemployment rate peaks at 6.1%, not far from its all-time peak of 6.2% in 2020 there too.
Shanghai soon to be deconfined
Shanghai officials said businesses including malls, department stores and supermarkets will still reopen from Monday as the outbreak there is considered under control. The objective being to regain normal living conditions from 1er June. In Beijing, on the other hand, it is still more than advisable to continue working from home. Transport has also been closed in several areas of the city due to a surge in daily cases of contamination observed on Sunday.
The latest news on the geopolitical front is of no support. Finland and Sweden have in fact indicated that they are ready to apply for the Brussels headquarters of NATO, which is of course not to the liking of Russian President Vladimir Putin.
Also in the background are fears that the major economies will fall into recession. Lloyd Blankfein, chairman of the board of directors of Goldman Sachs, believes that the probability has become ” very, very high ” in the USA. The bank has, in parallel, reduced its growth forecast for the country to 2.4% this year, against 2.6% previously, from 2.2% to 1.6% for 2023. To be continued at the end of the morning news the European Commission’s spring economic projections and, in the early afternoon, the New York Federal Reserve’s May manufacturing survey. After rebounding to 24.6 in April, the index should fall back to 15 points.
Renault leaves Russia
On the business side, Renault announced the sale from its subsidiary in Russia to the city of Moscow and from its 67.69% stake in Avtovaz to the Central Institute for Research and Development of Automobiles and Engines.
Casino confirms that it has launched the sale process for its renewable energy subsidiary GreenYellow.
Also an eye on Valneva while Brussels has indicated that it wants to terminate the contract which binds it to the company for the supply of vaccines against Covid.
In terms of analysts, JPMorgan downgraded Michelin from “outperformance” to “neutral”.