Monday, May 23, 2022
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Rates and China raise market concerns

(AOF) – European equity markets closed sharply lower in the wake of the negative trend on Wall Street. The CAC 40 fell 2.75% to 6,086.02 points. The Euro Stoxx 50 lost 2.58% to 3,535.46 points. In the United States, the Dow Jones dropped 1.8% and the Nasdaq, 3.5%, at the end of the afternoon.

Investors are worried about the impact of rising rates on a global economy whose health is withering. Around 5:30 p.m., the yield on the US 10-year yielded 2.6 basis points after hitting 3.208% earlier in the day, its highest level since November 2018.

Last week, employment figures, overall better than expected, no doubt confirmed the Fed in its strategy of accelerating the normalization of its monetary policy. In this respect, the markets await with interest the publication on Wednesday of the consumer price index in the United States for the month of April.

In this inflationary environment, China’s “zero Covid” strategy is giving markets cold sweats. The new lockdowns announced this weekend are reducing growth prospects for the world’s second largest economy and increasing pressure on inflation and supply chains in the rest of the world.

On the Paris Stock Exchange, Alstom (+1.9%) stood out favorably within the CAC 40, supported by the winning of a 2.5 billion euro contract in Germany. Conversely, TotalEnergies lost 4.9%, penalized by the fall of almost 5% in the price of a barrel of Brent.

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