The Paris Stock Exchange continues to decline in a movement of risk aversion that is affecting all of the world’s financial markets. The more offensive turn adopted by the US Federal Reserve and the tightening of health restrictions in China are indeed fueling fears about the outlook for the global economy. At European level, the 19 Stoxx 600 sector indices are in the red, starting with that of basic resources (-3.6%). ArcelorMittal fell by 3.8% and Eramet by 5.6%.
Mid-session, the Bedroom 40 down 1.39% to 6,171.35 points in a business volume of 860 million euros. The Parisian index is now losing 14% over the year and more than 16% compared to its absolute record of January 5 (7,384.86), thus approaching the “bear market” zone. The contracts future on American indices yield between 1.3% and 1.9%. Friday, the S&P 500 and the Nasdaq Composite lined up a fifth consecutive weekly decline, the longest series since June 2011 and November 2012 respectively.
Chinese foreign trade almost at a standstill
In China, exports rose 3.9% year on year in April, their weakest pace since June 2020, while imports stagnated amid near-paralysis of the economy linked to the tightening of health restrictions. in Shanghai, where the confinement could be extended until the end of the month. Beijing is also hit by tougher restrictions. Prime Minister Li Keqiang also warned about the labor market situation, which he described as ” complicated and serious “, which does not prevent the authorities from clinging to their “zero-Covid” policy.
In the United States, the American Federal Reserve announced last Wednesday a 50 basis point increase in its interest rates in an attempt to stem the sharpest price hike in 40 years. Last month’s higher-than-expected job creations further strengthened the “hawkish” camp within the Fed. On the bond market, the yield on the US 10-year bond tightened by 4 basis points to 3.1788%, its highest level since the end of 2018.
Putin denounces “unacceptable threats”
Inflation will be discussed again this week with the publication on Wednesday of the consumer price index for April in the United States. The consensus established by Bloomberg is for a slowdown in the rise to 8.1% over one year after 8.5% in March, which gives hope that the peak has been reached. Several Fed officials are due to speak this week, as President Biden prepares to deliver a statement on inflation on Tuesday.
In Europe, the Russian president justified his intervention in Ukraine by the aggressive attitude of Western countries towards Russia. In his opening speech at the 1945 victory celebrations, Vladimir Putin said that Russian forces are defending the homeland from a ” absolutely unacceptable threat “. According to him, Russian troops are continuing the battle against Nazism in Ukraine, while emphasizing the importance of ” to do everything so that the horror of a world war does not happen again “.
Chance of the calendar, this May 9 is also Europe Day. The leaders of the G7 countries pledged on Sunday to move gradually towards an embargo on Russian oil, thus joining the proposals of the President of the European Commission, Ursula von der Leyen. However, this proposal comes up against the refusal of Hungary. TotalEnergies fell by 1.1% in the wake of the 2% decline in the barrel of Brent crude from the North Sea.
JPMorgan for purchase on Euroapi
Cyclical stocks are under pressure. Schneider-Electric loses 2.7%, Renault 1.9%, Michelin 1.6% and Faurecia 2.6%.
Biggest rise in SRD, Euroapi increased by 5.9%. JPMorgan has started monitoring the specialist in active pharmaceutical ingredients, split from Sanofi, with a recommendation to “overweight” to aim for 17 euros. Sanofi yields for its part 1.2%.
Solutions 30 gains 1.3%. Exane BNP Paribas took over the cover of the title of the specialist in solutions for new technologies to “outperform” citing a new cycle of profitable growth and a possible takeover. The author of the note refers to the group’s decision to mandate Rotschild to find a reference investor.