(BFM Bourse) – The Paris Stock Exchange accelerated its decline in the afternoon to close this last session of May down after the announcement of degraded Chinese indicators. Over the whole month of May, the CAC 40 plunged 5.35%.
Investors who have followed the famous stock market saying “Sell in may, and go away” to the letter, or – “sell in may and go away” in the language of Molière – have had hollow noses.
For this last day of this fifth month of the year, the trend in Paris was heavy, for lack of encouraging news to eat. Signs of a later-than-expected recovery in the Chinese economy undermined the CAC 40. The flagship Parisian index thus closed sharply down 1.55% to 7098.70 points, not far from its two-month lows. registered in the session, at 7083.60 points.
Over a month, the results are even less flattering. The Parisian index may be clearly in the red (-5.35%) and therefore displays its first monthly decline of 2023. This erodes the annual gains of the CAC 40 below 10% at the end of this complicated month.
May was a nerve-wracking month for investors. The latest cause for concern is the contraction of manufacturing activity in China, for the second consecutive month, according to official data released on Wednesday. And luxury stocks themselves penalized by the situation in China, one of their main markets. register lower tonight. LVMH lost 2.6% just like Hermès when Kering lost 2.9%.
The state of health of the Chinese economy revives fears of a more global slowdown and relegates to the background the lull in prices in several countries of the euro zone, before the official publication Thursday of inflation figures in the area. In France, consumer price inflation slowed to 5.1% year on year in May, after 5.9% in April, according to INSEE data. On Tuesday, Italian figures also showed a slowdown in price growth to 7.6% year on year in May from 8.2% the previous month, as did in Spain, where inflation slowed in May to 3.2 % over one year.
Across the Atlantic, the labor market is doing well, even too well for investors who were still hoping for a break from the Fed in its rate hikes. The US Department of Labor reported a sharp increase in job creation, 10.1 million in April, after 9.59 million the previous month. Result: the markets estimate at nearly 70% the probability that the Fed will proceed to a rate hike of 0.25% at the end of the monetary policy meeting of June 13 and 14.
Also in the United States, the stock market debates obviously remain driven by the negotiations around the debt ceiling. The agreement reached between Republicans and Democrats to raise the debt ceiling must still pass the caudine forks of Congress, where each camp could express its dissatisfaction with the compromise reached. The vote will take place on Wednesday in the House of Representatives, then a priori Friday or Saturday in the Senate.
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Capgemini on a cloud
Among the survivors of the day, we can mention Capgemini which finished at the top of the CAC 40 thanks to a gain of 6.8%. The group benefits from several good news, namely the announcement of winning two contracts in Catalonia and above all the extension of its long-standing strategic partnership in data analysis and artificial intelligence with Google Cloud.
The digital services company is followed by JCDecaux, which closed up 4.1%, after announcing on Tuesday evening the acquisition of the activities in Italy and Spain of Clear Channel Outdoor Holdings.
On the other side of the spectrum, cyclical stocks suffered significantly, including the automotive sector as a whole: Valeo plunged 5.9%, Faurecia and Plastic Omnium returned 5.3%. Renault fell by 4.3%, Stellantis and Michelin lost more than 3%.
On other markets, the euro fell 0.7% to 1.0664 dollars. For its part, oil remains on the downside, not far from its 3-week lows. The contract for July on Brent from the North Sea yielded 0.5% to 73.33 dollars a barrel while that of the same expiry date on WTI listed in New York returned 0.8% to 68.91 dollars a barrel.
Sabrina Sadgui – ©2023 BFM Bourse