Consolidation session in Paris as on Wall Street, the big meetings start tomorrow

The Paris Stock Exchange consolidated on Monday, after its rebound of more than 2.5% on Friday, and Wall Street did the same at the opening, the major indices yielding from 0.2% to 0.8%. A lot of caution before the publication, tomorrow, of retail sales for the month of April across the Atlantic and quarterly results of several big names in distribution, like Walmart, Target and Home Depot. The only statistic of the day, the New York Fed’s activity index fell back into negative territory, at -11.6 points in May, against 24.6 in April.

In the middle of the afternoon, the Cac 40 lost 0.54%, to 6,328.33 points. Proof of the ambient wait-and-see attitude, trading volumes are low, around 1.2 billion euros.

A probability of recession very, very high »

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.

The European Commission lowered its GDP growth forecast on Monday due to the war in Ukraine, from 4% to 2.7% this year, and from 2.7% to 2.3% for 2023. By putting further upward pressure on commodity prices, causing further disruptions in supply chains and increasing uncertainty, the war is accentuating pre-existing headwinds to growth “, she explains. Inflation should reach 6.1% this year according to the Commission.

Shanghai soon to be deconfined

The statistics scheduled tonight in China also weigh in the minds of investors. Unsurprisingly, the health restriction measures deployed by the authorities 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. This is much more than the 6.1% drop that was expected by the consensus and that of 3 .5% of March. Industrial production for its part declined by 2.9% on an annual basis, after growth of 5% the previous month and compared to a slight increase of 0.4% expected. The unemployment rate peaks at 6.1%, not far from its all-time peak of 6.2% in 2020 there too.

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 is to return to normal living conditions from June 1st. 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.

Another disappointment on Valneva

On the business side, it is outside the flagship index that we have to look for the biggest shift of the day. Valneva plunges by more than 20% when Brussels has indicated that it wants to terminate the contract which binds it to the company for the supply of vaccines against Covid.

Casino, rose by almost 5% after confirming that it had launched the process of selling its renewable energy subsidiary GreenYellow. The action had already gained 9.8% on Friday.

In terms of analysts, JPMorgan downgraded Michelin (-0.7%) from “outperformance” to “neutral”. Oddo BHF went from “outperforming” to “neutral” on Seb (-3.8%).

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