The Paris Stock Exchange is moving towards a slight rise in opening in favor of the prospect of a further easing of containment measures in several European countries. The less marked than expected decline in Chinese foreign trade in March also gives hope for a gradual recovery in world trade. Attention will also be focused on the first quarterly results in the United States. Around 8:30 am, the contract future April on the Cac 40 index rose by around 1.3%.
In Europe, governments are working together to lift containment measures with the gradual reopening of nurseries and schools from May 11 in France, while Spain is considering resuming activity in certain sectors such as construction. Some non-food businesses are also starting to reopen in Italy. Germany, for its part, is considering the best way to bring about a gradual resumption of activity.
Good surprise from China
Asian markets were generally up this morning, buoyed by the announcement of a smaller-than-expected contraction in Chinese foreign trade in March. Exports denominated in dollars decreased by 6.6% year on year and imports by 0.9%, marking a slight improvement compared to February, against declines of 14% and 9.8% respectively anticipated by the market. Economists are cautious, however, and fear the surge will be short-lived as external demand is likely to be severely impacted by the coronavirus epidemic in the second quarter.
The markets are also suspended from the first quarterly publications of companies in the United States and Europe. ” Companies, analysts, traders, investors and strategists enter earnings season without real tools Writes John Stolzfus of Oppenheimer & Co in a note cited by Bloomberg. ” The unprecedented nature of the shutdown of the economy, social distancing and the establishment of containment spaces by the authorities generate an environment of uncertainty “, He adds. Banks JPMorgan and Wells Fargo, as well as Johnson & Johnson will present their first quarter accounts before the opening of Wall Street.
On the raw materials front, a barrel of Brent from the North Sea rose 1.3% to 32.17 dollars after the agreement of the OPEC + countries on a reduction in production of around 10 million barrels per day. However, this decision may not be enough to cope with the drop in demand, which is roughly double.
New dividend reductions
In France, Publicis announced a € 500 million savings plan and proposed to cut its dividend in half faced with the deterioration of the advertising market linked to the health crisis. The group also reported a 2.9% drop in its quarterly sales in organic data (excluding currency effects and changes in scope).
Great announced the freeze on the amount of the dividend that will be proposed for the 2019 financial year. The group had initially promised a 6% increase in its dividend over this period.
Valeo announced to renounce its 2020 targets and having negotiated an additional line of credit of one billion euros.
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