The slack of the Cac 40 Thursday turned into a sharper drop on Friday. From the opening, the Parisian index faltered, touching a session low at 10:30 am to 4,921.58 points. If the barometer rose somewhat later, this was not enough to allow the Cac 40 to regain 5,000 points at the end of the day. The index has indeed ended at 4,962.93 points, down 1.58%, in a volume of transactions hardly expanded of 2.3 billion euros. Several factors have contributed to diverting the market.
On the one hand, mixed indicators from China. While they confirm a continued recovery in activity in July, household purchases remain sluggish. Retail sales slipped 1.1% year-on-year last month, after a drop of 1.8% in June and an increase of 0.1% anticipated by the Bloomberg consensus. Since the start of the year, the decline has reached 9.9%. On the industrial production side, it did progress for the fourth month in a row, but it came out below consensus expectations, at + 4.8%, against an expected 5.2% increase.
Impasse
To the United States, today’s figures are mixed. Retail sales, which are still closely watched – consumption accounts for two-thirds of GDP – only grew by 1.2% in July, less than expected (+ 2%), but the “Poor performance” is largely due to the automotive sector. Excluding it, retail sales are up 1.9%, beating forecast by 1.2%. Also above expectations, the University of Michigan’s preliminary index measuring consumer confidence stood at 72.8 in August (consensus: 72), but remains close to 72.5 points the previous month.
Not enough to reinvigorate Wall Street. The Dow Jones hovers around equilibrium, while the expanded index S&P 500 still fails to set a new record. What could push him higher? Perhaps an agreement on a new plan to help the economy. But, for the moment, Republicans and Democrats remain at an impasse. House Speaker Democrat Nancy Pelosi has said she will not resume talks until Republicans increase their aid offer by $ 1,000 billion. It’s'” impasse “, Confirmed the economic adviser of the White House, Larry Kudlow, on CNBC. ” Given the current tax deadlock, it is extremely unlikely that consumers will receive additional tax assistance in August. It goes without saying that the outlook for September depends heavily on fiscal policy. Says Aneta Markowska, chief economist at Jefferies.
London re-imposes a fortnight
The resurgence of the health crisis is the other blow to financial markets. If additional proof was needed that the Covid-19 pandemic is regaining ground in France, London provided it by decreeing, Thursday, a fortnight against all people coming from France and going to the Kingdom -United. The obligation will come into force on the night of Friday 14th to Saturday 15th August. In the name of reciprocity, Paris will adopt a similar measure. It is not only the French in London’s sights, the Spaniards, Belgians and Dutch also have a fortnight imposed on them. Not enough to do business with Getlink. The operator of the Channel Tunnel has dropped …% on the stock market. In the tourism-transport sector, the title Air France-KLM, very volatile, lost 5.78%, Ryanair 3.2% and easyJet 6,6%. « If the trend continues, travel within the European Union could again be severely restricted by the fall, fears Milan Cutkovic, market analyst for the broker AxiCorp. And there is also an increased risk of regional reconfinement on the continent. »
On this weekend eve, caution was also required as Chinese and American representatives must take stock of the implementation of phase 1 of the trade agreement signed in January. Robert Lighthizer, the US Trade Representative, and Chinese Vice Premier Liu He must discuss via video conference. As a reminder, Beijing has pledged to increase its purchases of American agricultural products, but the account does not seem to be good due to the health crisis, which is slowing trade. According to the daily South China Morning Post, the governor of People’s Bank of China, Yi Gang, said Beijing will continue to honor its end of the bargain, especially with regard to financial openness.
–
