(CercleFinance.com) – The Paris Stock Exchange is back in the green, for a handful of points, thanks to a recovery on Wall Street, and while Sanofi is the locomotive of the CAC40 with +7%.
Wall Street is trying to recover after -3% decline in 48H (-1.5% twice) with a Dow Jones at +0.2%, an S&P500 at +0.1% and a Nasdaq back at ‘balance.
The markets continue to invoke (for almost 3 weeks) the announcement of a new easing of sanitary restrictions in China.
But whether ‘zero Covid’ is abandoned or not, there are more and more reception capacities in the isolation camps: these are millions of citizens quarantined (regardless of the reason) and who are not going not work for 10 days, or more depending on their ‘PCR’.
Note the collapse of Chinese exports and imports last month due to massive confinements: growth there could not exceed 3% as of December 31, 2022.
UBS reports “a good number of deconfinements at the local level, the reopening of certain offices and businesses and lesser obligations in terms of PCR tests, as well as the end of confinements in certain localities”
‘The government also wants to generalize vaccination among the oldest people and better inform the population about the Omicron variant’, adds UBS.
‘We expect a strong rebound in consumption and activity in services following these measures, but the recovery should not be as strong as that seen in mid-2020 in the United States and Europe’, warns however the Swiss establishment.
Analysts fear that this process of deconfinement will take time (from 3 to 6 months according to observers on site) and that the economic situation will continue to deteriorate in the meantime.
“A significant recovery in Chinese economic activity in 2023 would help improve the global growth picture, but caution is still warranted as China’s reopening path is far from clear,” said Geraldine Sundstrom. asset allocation portfolio manager at PIMCO.
The recent easing measures had already driven up the prices of some commodities and other assets linked to China, starting with luxury stocks.
Unsurprisingly, the presentation of the new health measures decided by Beijing is pushing up oil, with a barrel of American light crude advancing to $75.
In Europe, investors learned in the morning of the latest third-quarter GDP figures for the euro zone.
Seasonally adjusted GDP rose 0.3% and 0.4% in the EU compared to the previous quarter, according to an estimate published by Eurostat, the statistical office of the European Union.
In Germany, growth was down -0.1% in November.
In France, the trade balance recovered by 0.5 billion euros, and stood at -14.4 billion euros on a three-month moving average, in October 2022 according to CVS-CJO data from the customs administration. This revival is driven by the improvement in the energy balance.
In the United States, the second estimate of productivity in the third quarter has been revised upwards: it increased at an annualized rate of 0.8% over the July-September period, according to a second estimate published on Wednesday by the Department of Commerce ( against +0.3% initially).
In detail, production per worker increased by 3.3%, for a number of hours worked up by 2.5%.
Unit labor costs rose by 2.4% in parallel in the third quarter, which implies pressure on wages, with an annual increase which reached 5.3% over 12 months.
Year over year, that is, compared to the third quarter of 2021, US productivity fell 1.3%.
It remains to discover the traditional weekly US oil inventories.
The bond markets eased slightly with US T-Bonds at 3.55%, an ounce of gold rose by +0.7% to $1,784.
Our OATs erased -1pt at 2.2400%, Bunds -2pts at 1.78%, Italian BTPs -6pts at 3.602%.
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