Sixth session of decline in a row for the Cac 40, which fell by 5.5% in one week, Market news

Sixth session of decline in a row for the Cac 40, which fell by 5.5% in one week, Market news

The month of September is off to a bad start for the Paris Stock Exchange. The Cac 40 (-1.48% to 6,034.31 points) today aligns a sixth session of decline in a row, after having closed the month of August down 5%. Half of the summer rally wiped out as energy prices hit new highs in Europe last week and central bankers’ determination to tackle inflation at Jackson Hole symposium , even if it means plunging the economy into recession by raising interest rates.

On Wall Street, the Dow Jones lost 0.5%, the S&P 500 1% and the Nasdaq Composite of technology companies, among the most sensitive to interest rates, dropped almost 2%. The yield on two-year US sovereign bonds is at its highest since November 2007, now set above the 3.5% threshold. Note the 10% dip of Nvidiaafter the White House’s decision to allow chipmakers to sell components to the China only subject to obtaining a government license.

Watch out for third quarter GDP

The Cac 40 was weighed down today by a series of bad economic figures. In China, manufacturing activity entered a contraction phase in August, with 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.

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.

In eurozone, the final manufacturing index for August was announced at 49.6 points, down another 0.1 point compared to July. The trend is frankly bad in Germany, where the industrial component fell from 49.8 to 49.1 points in the space of a month. Only France pleasantly surprises, with a PMI index which starts again beyond 50 points, therefore in the expansion zone, at 50.6 points, against 49 in July.

“Manufacturers in the euro zone, still facing serious difficulties, are reporting a further marked decline in their production volumes in August. Manufacturing activity thus fell for a third consecutive month, a trend foreshadowing a drop in GDP in the third quarterdeciphers Chris Williamson, chief economist at S&P Global, in charge of the monthly study on the PMI. With the survey’s forward-looking indicators also pointing to a potentially sharp acceleration in the contraction over the coming months, economic downside risks have increased in the region. »

On the other side of the Atlantic, the ISM manufacturing index, more considered the benchmark, remained in expansion territory. It even managed to remain stable in August, at 52.8 points, while a decline to 51.9 points was anticipated. The weekly registrations unemployment They fell slightly to 232,000, against 248,000 expected and 243,000 the previous week.

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