Market: the trend weighed down by Chinese statistics


(CercleFinance.com) – The Paris Stock Exchange is expected to start the first session of the week down slightly, with poor Chinese statistics having reinforced fears of a marked slowdown in global economic growth.

Around 8:15 a.m., the ‘future’ contract on the CAC 40 index – expiring in May – lost 34.5 points to 6311 points, announcing a start to the session on a modest decline.

Asian markets were held back on Monday by the latest indicators from China, which showed a 2.9% contraction in the country’s industrial production in April, amid the resurgence of the Covid epidemic.

Official statistics released in the morning also show retail sales of consumer goods fell 11.1% year-on-year last month.

A spokesperson for the State Bureau of Statistics (BES) spoke of “short-term and external” impacts linked to the health situation, but the accumulation of signs of a slowdown in the second world economy are starting to worry investors.

The risk of a reappearance of ‘stagflation’, which would weigh on consumption and corporate margins, is now the question that is on everyone’s lips and occupies everyone’s mind.

“It’s a situation where growth is sluggish, even negative, combined with high inflation,” recalls Vincent Boy, market analyst at IG France.

‘This is extremely negative for global economies and also makes it difficult for central banks to intervene’, underlines the professional.

The week that is beginning promises to be once again very lively for the financial markets, which will have to digest a new burst of leading macroeconomic indicators.

The retail sales figures in the United States, as well as the first estimate of the GDP of the euro zone in the first quarter, expected tomorrow, will be closely followed in particular.

Interventions tomorrow by Fed boss Jerome Powell and ECB president Christine Lagarde at two economic conferences will also be watched by market participants.

On the results side, the quarterly publication season is coming to an end, even if some latecomers like Ryanair, Walmart, Home Depot, Vodafone or Cisco have planned to unveil their accounts in the coming days.

On Friday, the Parisian market had managed to end the last session of the week on an increase of 2.5% to 6362 points, its best closing score since May 5, i.e. a weekly gain of 1.7%.

If this recovery has made it possible to put an end to the sequence of sharp decline which has affected the Parisian index since the beginning of April, the CAC seems for the moment to be struggling to find a zone of stability and to reconnect with true serenity.

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