(News Bulletin 247) – The correction prevailed, but Wall Street did not end at the bottom: while losses exceeded -1.5% on the Nasdaq, it ended at -1.06%, the Dow Jones lost 0.57% (as at the start of the session) and the S&P500 dropped 0.70% (against -1.2% around 7:00 p.m.).

There are always buyers, it remains to be seen whether these are ‘conviction’ purchases or whether underinvested managers who have missed the ‘bull-run’ of artificial intelligence are not completing their portfolios on later, taking advantage of the first somewhat striking dip that occurs.

Because clouds are gathering on the horizon: oil has now recovered more than 10% in two weeks and +30% since mid-June, which is quite counter-intuitive in a context of slowdown in industrial activity in worldwide, especially in China.

Beijing, which is struggling to prevent the bankruptcy of Chinese promoters indebted between $100 and $300 billion, is unable to stimulate its economy to the extent that investors had hoped for. It focuses on targeted, rather ‘technical’ measures, and no longer on a major recovery plan based on giant infrastructure projects.

And above all, the weakness of the demography – which does not prevent youth unemployment – is weighing on consumption, which has not taken off with a bang, as most of the strategists who have recommended betting fully on the luxury sector.

The rise in the margins of Hermès and LVMH have concealed this basic problem: the Chinese locomotive is no longer powerful enough to pull the wagons of emerging economies.

And as if that weren’t enough, after Huawei was banned over US ‘digital security’ concerns, China has decided to give back to the Biden administration: Beijing has banned employees from government agencies the professional use of the iPhone, and much more serious, the owners of iPhones are prohibited from taking it to their place of work.

Also, sales of the future iPhone-15 are not looking good in the Middle Kingdom, and the Nasdaq did not resist the fall of Apple (-3.6%), nor that of Nvidia ( -3.1%) which could be banned from exporting certain ‘high performance’ components to China. Also note the declines of two other heavyweights: Amazon (-1.4%) and Alphabet (-1%).

On the bond side, it’s not brilliant: interest rate pressure continued, in the wake of oil (which was flirting with $87 on the NYMEX). US T-Bonds continued to deteriorate, the 10-year having crossed the 4.300% mark with +3.5 basis points to 4.3030%.

The day’s US figures were mixed, even a little contradictory: the ISM services index saw a surprise rise of 1.8 points to 54.5 in August, but the S&P Global composite PMI index finally established at 50.2, against 50.4 in flash estimate and after 52.0 for July.

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