Cac 40 catches its breath after bad Chinese indicators, market news

After a 2.52% jump on Friday that avoided the curse of a fourth straight week of decline, the Cac 40 index took a breath on Monday, ending with a slight 0.23% drop to 6347.77 points. Wall Street is moving along the same trajectory, reversing some of Friday’s gains.

Retail sales in China plummeted

It must be said that the numbers released last night in China call for caution. Very strict sanitary measures in place in several major cities across the country led to a sharp drop in retail sales and industrial production in April. The former was down 11.1% for the year, while the consensus was for a decline of “only” 6.1%. With the exception of basic commodities such as food and medicine, which benefited from precautionary shopping and stockpiling by the Chinese consumer, sales of cosmetics, jewelry and telecommunications fell by more than 20%, sales in the automotive industry by just over 30%. . Purchases of goods online grew by 5.2% and accounted for almost a quarter of total sales. At the same time, the unemployment rate increased. It has now reached 6.1%, very close to the February 2020 level of 6.2% at the very beginning of the health crisis. Fortunately, the conclusion is coming to an end, at least in Shanghai. Shopping malls, department stores and supermarkets can open to visitors from Monday. The goal is to return to normal living conditions from June 1, in two weeks. On the other hand, in Beijing, education is still conducted remotely. Transportation has also been closed in several areas of the city due to a spike in daily infections seen on Sunday.

Behind the crisis in China lies another issue, namely the synchronous decline of the main blocs of China, the US and Europe. For Lloyd Blankfein, chairman of the board of directors of Goldman Sachs, the likelihood of a recession has become very very tall The bank also lowered its growth forecast for the country this year from 2.6% to 2.4% and from 2.2% to 1.6% for 2023. Following this, the European Commission revised its estimate of GDP growth from 4% to 2.7% this year and from 2.7% to 2.3% for 2023.” By putting further upward pressure on commodity prices, causing further disruptions in supply chains and increasing uncertainty, war [en Ukraine] amplifies pre-existing unfavorable growth factors “, – explains the institution. According to her, this year inflation should be 6.1%.

The rest of the week will be marked by major events, including the release of April Atlantic Retail Sales data and quarterly results from several prominent US companies such as Walmart, Target and Home Depot.

Bad day for Valneva

From the business side Valneva fell by 19.09%, finishing last in the SRD. Brussels plans to terminate the contract that binds it to the Franco-Austrian biotech company for the supply of vaccines against Covid-19, while the verdict of the EMA, the European Medicines Agency, has not yet been issued and that the Committee for Medicines to theoretically decide on the use of human should be accepted before the end of the second quarter of this year.

Vice versa, Casino rose 4.76% after jumping almost 10% on Friday. Distributor initiated the process sale of renewable energy subsidiary GreenYellow.

In CAC 40, Renault (-0.04%) confirmed the sale of its 68% stake in parent company Lada, as well as its Moscow plant, to a Russian government agency for a nominal amount. Thus, he draws a line under 2.2 billion euros of assets, while maintaining the possibility of medium-term income. Finally, JPMorgan downgraded the rating Michelin (+0.37%) from better to neutral, Oddo BHF did the same on Seb (-3.53%).