The Paris Stock Exchange is trading at two-month lows, while futures on US indices are expected to fall further on Wall Street at the time of opening. The more aggressive turn of the US Federal Reserve and the tightening of health care restrictions in China are once again fueling fears of a shrinking world economy or even a recession. At the European level, the 19 sector indices Stoxx 600 are in the red, starting with the indices of travel (-4.2%) and basic resources (-3.9%). ArcelorMittal fell by 3.8% and Eramet by 5.6%.
Around 2:30 p.m. Bedroom 40 fell 2% to 6,132.94 points with a business volume of 1.4 billion euros. The Paris index is now losing 14.3% for the year and almost 16.5% compared to the absolute record of January 5 (7384.86), thus approaching the zone of the “bear market”. Contracts future according to American indices, yields range from 1.3% to 2.2%. Friday, S&P 500 and Nasdaq Composite there was the fifth consecutive weekly decline, the longest series from June 2011 and November 2012, respectively.
Reflecting investor concerns, the iTraxx index, which measures the cost of hedging against the risk of defaulting European corporate bonds, has reached its highest level since 2020. European stocks held surprisingly well until last week, so it is not surprising that they hit the bad news how the ECB is preparing to tighten monetary policy, says Est Dweck, head of investment at Flowbank. Morgan Stanley strategists also believe that the risks are growing for the margins of European companies.
China’s foreign trade is almost at a standstill
In April, China’s exports grew by 3.9% year on year, the lowest rate since June 2020, while imports stagnated amid almost economic paralysis due to tightening health restrictions. In Shanghai, where quarantine may be extended until the end of the month. Beijing has also suffered from severe restrictions. Prime Minister Li Keqiang also warned about the situation on the labor market, which he described as ” complex and serious Which does not prevent the government from holding on to its “zero Covid” policy.
In the United States last Wednesday, the Federal Reserve announced an increase in its interest rates by 50 basis points, trying to stop the biggest price increase in 40 years. Last month’s creation of higher-than-expected jobs further strengthened the Fed’s “hawk” camp. In the bond market, the yield on 10-year US bonds fell by 3 basis points to 3.1548, which is the highest level since the end of 2018.
Putin condemns “unacceptable threats”
Inflation will be discussed again this week with the publication on Wednesday of the consumer price index for April in the US. The consensus established by Bloomberg predicts a slowdown to 8.1% in 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 make 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 introductory speech at the Victory Day celebrations in 1945, Vladimir Putin said that Russian troops were defending the homeland from ” absolutely unacceptable threat “According to him, Russian troops continue to fight Nazism in Ukraine, emphasizing the importance.” do everything possible so that the horrors of world war do not happen again “.
Chance of the calendar, this May 9 is also Europe Day. G7 leaders pledged on Sunday to move gradually towards an embargo on Russian oil, thus joining the proposals of European Commission President Ursula von der Leyen. However, this proposal was rejected by Hungary. TotalEnergies fell 3.3% after falling 2.7% of a barrel of Brent from the North Sea.
JPMorgan for purchase in Europe
Cyclical stocks are under pressure. Schneider-Electric loses 3.1%, Renault 17%, Michelin 1.8% and Fauretia 2%.
The largest increase in SRD, Europe increased by 6.6%. JPMorgan has started monitoring an active pharmaceutical ingredients specialist, separate from Sanofi, with a recommendation to “gain weight” for 17 euros. Sanofi profitability of its share of 1.2%.
Alstom an increase of 2.3%. The manufacturer of railway equipment has announced that it has won an order worth almost 2.5 billion euros from the railway operator Baden-https: //invest.lesechos.fr/actions/actualites/alstom- will-supply-130-trains -to-the- german-operator-sfbw-for-nearly-2-5-bn-euros-2016017.phpWürttemberg, in southwestern Germany.