Cac 40 fell 1% after Nasdaq crash and poor performance in China, market news

The Paris Stock Exchange fell at the opening of this first session in May, traditionally a bearish. Inflation is rising rapidly, and Chinese growth is being hampered by health restrictions in several major cities across the country. In addition to continuing the quarterly earnings season, the next few days will be interspersed with monetary decisions by the US Federal Reserve and the Bank of England, as well as the April report on employment in the United States.

At 9:10 p.m. Bedroom 40 lost 1.20% to 6455.53 points.

This morning, Asian markets fell due to continued deterioration in manufacturing activity in China in April. The official PMI fell 2.1 points to 47.4, below the 50-point threshold separating growth and decline for the second month in a row. Caixin’s industrial PMI also continued to decline to 46 points from 48.1 in March. The session will also be animated by the final S&P Global and ISM indexes in Europe and the United States in April.

An eye on Fed rates and balance

If the number of infections in China slows down, Beijing will leave gyms and theaters closed during the three Labor Day holidays, during which markets will remain closed from Monday. Financial centers in Hong Kong and London will also remain closed today.

On Friday, Wall Street fell sharply after the worst week since late January, ending one of the worst months since the 2020 pandemic. Falling stocks and rising bond yields tighten financial conditions two days before the Fed’s monetary decision, which should lead to an increase in federal funds by 50 basis points, the highest level since 2000. The Federal Reserve could also announce its intention to reduce its balance sheet. The more aggressive tone adopted by several central bank officials indicates other important gestures to stop the inflationary spiral. According to the FedWatch instrument from the CME Group, the market expects the Fed rate to return to 3% or even higher by the end of the year.

The European Central Bank could also raise the bar. Vice President Luis de Gindos has indeed indicated that the ECB may decide to suspend asset purchases in July pending a future rate hike. This will depend on the central bank’s new economic forecasts, which will be released in June.

Qantas chooses Airbus for direct Sydney-London flights

In addition to the higher cost of credit, the tightening of monetary policy creates the specter of a recession, especially as price pressures are exacerbated by the growth of raw materials associated with the war in Ukraine. Some fear the situation could worsen as the European Union is expected to try to agree this week on progressive restrictions on Russian oil imports, which could lead to a full embargo by the end of the year, Bloomberg reported, citing sources familiar with the debate.

Automakers are down 22.6% from new car registrations in France last month. Renault and Stellantis yield more than 1%. The same for Fauresia and Valeo.

Technologies STMicroelectronics and World line fell nearly 2% after the Nasdaq fell more than 4% on Friday.

Casino flounder 1.5%. Citi has reduced the target price for the title of distributor from 27 to 17 euros.

Airbus resists (-0.3%). Qantas Airways has announced that it has signed a contract with a European aircraft manufacturer for 12 A350-1000 aircraft that can operate non-stop flights between Sydney and London, as well as 40 other aircraft to upgrade its fleet.