The session had started badly. But with the help of Wall Street (again), the Cac 40, which fell 1.5% to the lowest of the morning, managed to raise the bar in the afternoon, in reaction to the publication reassuring statistics across the Atlantic. Before unfortunately relapsing, when profit taking began to prevail in New York. The flagship index of the Paris Stock Exchange ends down 1.15%, to 4.445.45 points, in a volume of 2.5 billion euros, rather fleshed out for a holiday. At closing time in Europe, the Dow Jones lost 0.64% and the Nasdaq Composite 1.23%.
Unemployment at over 17% in the United States
The program was busy this afternoon in the United States. Against a backdrop of population containment, weekly jobless claims were once again closely watched. No real surprise, they slowed down (as expected by analysts’ consensus). They stand at 2.43 million, against 2.68 million the previous week and 2.45 million expected. Cumulative applications in progress still now exceed the 25 million American threshold. The real unemployment rate in the country can now be estimated at 17.2%, against 15.5% previously.
U.S. weekly jobless claims at 2.44 million last week, Continuing claims rise to over 25 millionhttps: //t.co/AQnkJSkapu pic.twitter.com/eHQPmQYXgw
– Bloomberg Markets (@markets) May 21, 2020
The Philly Fed index, which measures the evolution of activity according to purchasing managers in the Philadelphia region, also, as expected, raised the bar for May, to -43.1 points, not far -41.5 points of consensus, after -56.6 points in April. Among the other figures of the day, the PMI composite index rose to 36.4 points in preliminary data for May, better than the 27 points expected, with in particular 36.9 points in services, against 26.7 points in April and 32.5 points anticipated.
Europe fundamentally in contraction
This morning, the PMI activity indicators also reflected an improvement in the euro zone in May, and even a little stronger than expected, after the collapse observed in April. On the scale of the area, the index thus goes up from 13.6 to 30 points, against 27 points anticipated by consensus. In France, it went from 31.5 to 40.3 points for its manufacturing component (36.1 expected) and from 10.2 to 29.4 for that of services (26). In Germany, the index rebounds from 16.2 to 31.4 points in services but the recovery is slower in the industry, with a sub-index rising by just over two points, to 36, 8 points.
For Capital Economics experts, ” today’s PMI suggests that the economy likely bottomed out in April, suggesting that it is now slowly on the road to recovery. “But given the direct impact of the containment measures implemented in the various countries,” it seems more likely that the low level of PMI reflects the way in which activity is evolving compared to pre-virus levels, rather than a direct comparison with that of April ” With figures below 50, Europe is therefore still fundamentally contracting.
A cold war scenario
On the merits, investors continue to worry about tensions between the United States and China, which could go up a notch. Wall Street stalled yesterday in the middle of the day, before resuming its ascent, when the Senate passed a bill to increase surveillance of foreign companies, especially Chinese. The plan would notably ban Chinese companies from being listed on the US stock exchanges. Alibaba, Baidu and JD.com, which are listed on the New York Stock Exchange, immediately lost ground. No official reaction, for the moment, from Beijing.
Oanda analysts say ” we are probably moving towards a cold war scenario, Trump and his team being particularly critical of the Chinese in the run-up to the November elections. The last thing he needs is for him to be blamed for the number of deaths looming in the United States at a time when the economy is in dire straits. He will do whatever it takes to prevent this from happening. “
Over 5 million cases of Covid-19 worldwide
Side health crisis, the World Health Organization reports that the number of new cases of Covid-19 has just reached a daily record in the world with more than 100,000 new cases detected in the last 24 hours, including more than 45,000 in the United States and nearly 10,000 in Russia. In total, the number of cases now exceeds 5 million, according to the count of Johns Hopkins University.
In terms of values, cyclicals are prominent this Thursday. Saint Gobain increased by almost 5%, followed by SRD by Verallia (+ 4.3%) and Colas (+ 3.1%). Among the main decreases, we note that of Natixis (-7.9%). Unibail-Rodamco-Westfield fell 8.1%.
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