After two days of rebound, the European stock markets seem to have exhausted their stock of optimism in the face of the rise in the wave of contaminations at Covid-19 in the United States and its economic consequences which, in turn, risk hitting the Old Continent .
This Thursday, the European financial centers in the red. The trend is getting worse at the start of the afternoon. At 1:30 p.m., the London Stock Exchange lost 2.1% while the Frankfurt Stock Exchange dropped 2.9%. The Paris Stock Exchange is also down 2.65%, like the Euro Stoxx 50, at -3%.
On the Paris Stock Exchange, Airbus (+ 4.7%), Accor (+ 3.3%), Danone (+ 1.9%), Pernod Ricard (+ 1.5%) are at the top of the list of the strongest progressions. On the other hand, Publicis sold 7.1%, Technip lost 6.9%, Engie and Bouygues 6.3%.
Oil dropped 1.3% to 27 dollars a barrel, while gold gained 0.4%.
The US markets, despite the rebound from the previous day, should open in decline, around 1% for the Standard and Poor’s 500 index.
In the United States, weekly unemployment benefit claims (3.28 million) last week broke the previous record in October 1982 (695,000). They augur for a surge in the unemployment rate, which had reached its lowest level in 50 years in February (3.5%).
The epidemic has arrived in force in the United States, and especially in the city of New York: the country has just passed the symbolic bar of a thousand victims. As in the rest of the world, the epidemic risks putting a serious brake on the American economy.
United States “May well be in recession” but the priority is to control the spread of the coronavirus epidemic, Federal Reserve Chairman Jerome Powell said Thursday in an interview with NBC. A statement contradicting the position of Donald Trump, who wants the activity to resume as soon as possible. The president of the Federal Reserve expects growth to pick up in the second half of the year.
Bank Goldman Sachs has again lowered its growth forecast for the US economy in 2020. Its gross domestic product (GDP) is expected to fall 3.8% this year. The eurozone would record a 9% drop in GDP this year, and China would experience its slowest growth rate (+ 3%) since 1976.
However, not everything is black: tonight, the European Central Bank published the legal text of its spectacular plan to combat the economic consequences of the coronavirus in the euro zone of 750 billion euros. The institution had then said that its action would have “no limit”. This translates, in this text, by the removal – in the case of asset purchases of the PEPP anti-coronavirus program only – from the 33% lock that it had always imposed in the repurchase of debt. “In short, the decision removes virtually all constraints on asset purchases, thereby strengthening the credibility of the ECB’s commitment,” said Frédérik Ducrozet, economist for the Swiss bank Pictet.
On Wednesday, the world’s stock markets experienced a second consecutive day of rebound. Far from being a trend, this increase resembles the bursts that the markets experienced during their descent into hell between 2008 and 2009. However, over the last five sessions, the CAC 40 has regained 18%. But it still remains down 25% since the start of the year.
The 30% fall on Wall Street since February 19 was the fastest in its history (22 trading sessions), according to Bank of America. In 1929, the 30% fall in American stocks spanned 31 sessions and 38 in 1987, the year of the crash.
This rebound had been carried by the agreement of the American Senate Wednesday evening on the plan of massive support of the economy of 2.000 billion dollars aiming in particular to help the workers who have lost their jobs and the affected industries, and to buy medical equipment . The text must now be approved by the House of Representatives, controlled by the Democratic opposition, before being sent to Donald Trump for promulgation. The House vote is expected to take place on Friday.