Sixth session of decline for the Cac 40, China also brings its share of bad news, Market news

Sixth session of decline for the Cac 40, China also brings its share of bad news, Market news

Sixth session of decline in a row for the Paris Stock Exchange, who sees the threshold of 6,000 points approaching rapidlyrecrossed during the session on July 15, before a rally in the second half of the month which had enabled the Cac 40 to climb by nearly 9% over the month.

In the early morning, the flagship index lost 1.14% to 6,054.63 points.

Two origins to this new poor performance. Wall Street, first of all, where the indices experienced another red session – the fourth in a row for the Dow Jones – the “firm and direct” speech of Jerome Powell on inflation has still not been digested by operators across the Atlantic.

But the Stock Exchange must face, this Thursday, a new front, coming from China this time. Manufacturing activity entered a contraction phase in August, the final private PMI-Caixin index coming out below the 50-point threshold for the first time in three months. It falls to 49.5 points, against 50.4 in July. In question, a weakening of demand, against a backdrop of rationing of electricity and the resurgence of the Covid-19 epidemic. Already, two days ago, official figures from the Chinese government showed that demand was failing with a new orders sub-index slipping into the red after two months of growth.

What to worry about. Especially since in China, the health crisis is far from over. Nearly 4 million residents of the cities of Chengde and Xinle in Hebei, near Beijing, were locked down yesterday as authorities wanted to avoid a runaway in Covid cases ahead of the big meeting of the Communist Party of China in autumn. North of the city, more than 13 million, in Tianjin, had to undergo a PCR test after the detection of 80 positive cases in the space of two days.

European PMIs in the viewfinder

After the Chinese alert, we will follow all the more the PMI activity indices which will be presented in the morning in the countries of the eurozone. Here too, the final data for August should confirm the anchoring of the manufacturing components in contraction territory, in France, in Germanyas in the region as a whole.

On the other side of the Atlantic, the ISM manufacturing index, which is more considered the benchmark, remains, for the time being, in expansion territory. It is expected at 52 for the past month, but it remains on a downward trend for eighteen months. Three other American indicators will punctuate the afternoon: new registrations in the unemployment for the week ended August 27, the second estimate of second quarter productivity and construction spending in July.

Euroapi best reaction of the day

On the value side, Pernod Ricard delivered organic operating profit growth of 19% for its 2021-2022 financial year, exceeding expectations, as sales were contained by strong demand in Europe, China and the UNITED STATES. Turnover amounts to 10.7 billion euros. The action nevertheless lost 0.8% in the wake of the market.

Eiffage confirmed its annual outlook after a strong increase in its results in the first half, of 36.2% in terms of net profit, from billings up 8.6%. The title also lost 1.9%.

Euroapifrom Sanofi, also confirms annual forecasts after a 10% increase in sales at the end of June. Consolidated operating income before depreciation and amortization and excluding restructuring costs increased by more than 20%. The producer of active pharmaceutical ingredients rose 3% on the stock market.

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