Surge in sight for the Cac 40 after stronger than expected growth in China

The slightly stronger than expected growth of the Chinese economy and the hopes of intervention by the country’s central bank should give a boost to the Paris Stock Exchange at the opening. But activity is expected to be limited due to the closure of Wall Street for Martin Luther King Day. Around 8:30 a.m., the contract future January on the Cac 40 index gained 0.2%.

China’s gross domestic product rose 4% in the fourth quarter, slightly ahead of the 3.6% rise predicted by economists. Over the whole of 2021, the increase reached 8.1%, against an estimated 8%. Nonetheless, the pace of growth remains the weakest in a year and a half, while retail sales and industrial production in December were disappointing.

Surprise reduction in medium-term rates

The markets anticipate new support measures from the People’s Bank of China to revive an economy which remains weakened by the problems of the real estate sector and the zero-Covid policy which weighs on consumption and increases the tensions on the supply chains. ‘supply. The Chinese central bank has also announced a surprise reduction in its interest rates on two medium-term loans, the first since April 2020.

The orientation of Chinese monetary policy contrasts with that of the US Federal Reserve, which is moving towards three to four interest rate hikes this year in an attempt to curb inflation at its highest in nearly 40 years. Fed officials are entering a blackout this week ahead of the January 25-26 monetary policy committee meeting.

The yield on the US 10-year sovereign bond closed at 1.7841% on Friday after touching 1.8% last week, its highest level since the start of the pandemic in 2020. If US bond markets are closed As of Monday, rate tensions remain in Asia and Europe, where the German 10-year Bund yield was on the verge of moving back into positive territory last week for the first time since May 2019.

The health sector driven by an offer

The quarterly results season begins slowly in France with Alstom’s third quarter accounts on Thursday. In the United States, Morgan Stanley, Goldman Sachs, Bank of America, Procter & Gamble and Netflix must return their copy for the fourth quarter in the coming days.

The healthcare sector could be surrounded after Unilever’s £50 billion bid for the consumer healthcare arm of GlaxoSmithKline was rejected by GSK.

Among analyst ratings, Morgan Stanley downgraded Great from “overweight” to “line weight”. HSBC moved from “buy” to “hold” on EDF, the target price is reduced from 15.10 to 10 euros.

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