Monday , November 30 2020

CAC40: scenario “V” after decline towards 4912, ECB support

( – The Paris Stock Exchange increased losses by as much as -1%, with the first part of Ch. Lagarde was disappointed, in particular, the mention of the asset purchase program unchanged until December, the date on which the intervention was recalibrated.

But the markets are partially smiling again (the CAC40 is back to -0.3%) with another short sentence in response to a journalist’s question: ‘we (the ECB) will not stay frozen if things get worse’ and urges Europeans to ‘immediately develop a new support plan ”.

The head of the ECB also points out that the fourth quarter is already marked by recession (“November may turn out to be very negative”) and deflation.

Prices may not start rising in the Eurozone until 2022, meaning real rates will remain negative for at least another 18 months and perhaps 2 more years before hitting just + 2%.

One of the first consequences of rather pessimistic forecasts for the economy is the fall of the euro from -0.5% to 1.1680 against the dollar.

This day also looked promising in terms of economic indicators, including the first US GDP estimate for the third quarter of the week.

The US economy rebounded by 33.1% in the third quarter of 2020. In annual terms (against expected + 32%), according to the first estimate of Gross Domestic Product (GDP) published by the Department of Commerce.

This rebound is symmetrical to a decline of -31.4% in the final estimate for the second quarter.

According to figures published on Thursday by the Department of Labor, the number of unemployed in the United States fell by 40,000 per week, much more than expected.

The first unemployment benefit applications totaled 751,000 in the week following October 24, while economists had expected an average of 780,000 registrations.

The four-week moving average also fell to 787,750 last week, or 24,500 week after week.

The number of people receiving regular benefits was 7.7 million people last week, compared with 8.5 million in the previous week.

It remains to consider retail sales, the “main engine of growth”, as Oddo BHF reminds us.

In New York, US markets experienced their worst trading session since late June, as Dow Jones fell 3.4% and equalized all gains since early August. For its part, the Nasdaq fell 3.7%, to its lowest level since October 2.

The rise in health measures and restrictions in everyday life to fight the spike of the virus has also pushed oil prices back by almost 6% in New York City.

In Asia, where the epidemic is now less virulent, the Tokyo stock exchange showed only a decline of around 0.4% at the end of the session on Thursday. Conversely, the CSI index of the 300 major companies listed in Shanghai and Shenzhen increased by more than 0.7%.

Numerous stocks continued to decline, notably CGG oil and gas stocks which recorded a new absolute low towards 0.45E, Vallourec which fell to 11.4E, Technip to 4.50E.

New absolute minimum for Air-France (-3% towards 2.7E), initial collapse of -13% on Albioma to around 37E before rebounding towards 40E

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