What brought down the Cac 40? A deeper-than-expected recession in the eurozone and the slowing recovery in the United States, Market News

The Paris Stock Exchange lost ground again on Tuesday. The Cac 40 Closes this session down 0.74% to 5.043.73 points, in a very low trading volume of 2.6 billion euros. Three-quarters of the index components end up in the red, but it’s the mall manager Unibail-Rodamco-Westfield which shows the largest decrease (-3.14%). Outside the Cac 40, Sodexo, which lost its place in the flagship index to Teleperformance at the end of June, lost 4%. The group catering has lowered its forecast for turnover for the fourth quarter, now expected to decline by 27%, and not more than 15%, due to the health crisis.

The consequences of the coronavirus on activity and the economy are difficult to predict. Businesses and institutions are adjusting their focus as they gain insight. The European Commission has warned that the contraction of the economy in euro areas would be stronger this year than she had anticipated in May. Now it expects a drop in GDP of 8.7%, including a fall of 17% in the first half before an uneven rebound between member countries in the second half of the year.

To the United States, the recovery is starting to show signs of weakness. The President of the Fed d’Atlanta, Raphael Bostic, said to Financial Times that the high frequency data (mobilities, high frequency) showed trends “Disturbing” slowdown due to the steady increase in the number of new cases of coronavirus in the southern and western states. The recovery seems to be more « cahoteuse » provided that. The Fed is trying to determine whether or not this halt is temporary, adding that its biggest concern was how permanent the job losses are.

Otherwise, according to a survey carried out for the Financial Times and the Peter G. Peterson Foundation to likely American voters, from those who believe that the American economy “Will straighten up completely” in one year went from 42% to 37%. The proportion of those who think the recovery will need a year or more has gone from 58% to 63%.

The stock market is not a way to make a fortune overnight

And to make matters worse for the market, the China calmed the stock buying frenzy it had itself sparked yesterday. As a reminder, the financial daily Securities Times, controlled by the state, recommended yesterday to the Chinese to buy stocks, just to send the world the signal that the country is showing resilience in the face of coronavirus and to make it easier for companies that will need to raise funds. “In the world according to Covid-19, the economy needs more than ever a healthy rise in the stock market. “ The abundance of Chinese savings and the liquidity injected by the central banks are there, according to the Securities Times, to favor the rise of the markets. Results: Chinese indices gained between 4 and 6% yesterday, in huge volumes. To calm the game, this same newspaper urged the population this morning to be aware of the risks of investing in stocks. According to the media, the stock market should not be used as a means of trying to make a fortune overnight.


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