The Paris stock exchange, which fell sharply this morning, subsequently wiped out most of its losses thanks to the publication, early in the afternoon, of the consumer price index for UNITED STATES reflecting a surprising slowdown in inflation, excluding volatile elements, in March. Consumer prices rose as expected by 1.2% in a month and 8.5% in a year, from 8.4% expected. In ‘core’ data (excluding food and energy), the increase is 0.3%, up from 0.5% in February and an estimated 0.5%. In the bond market, the yield on the US 10-year bond fell by 7 basis points to just under 2.71% at the close of European stock indices, after reaching 2.83% this morning. for the first time since the end of 2018.
As Wall Street recovers from yesterday’s slump, Bedroom 40who had escaped the red wave the day before, investors say they are relieved by Emmanuel Macron’s lead after the first round of the elections The French presidential election ended today with a 0.28% drop to 6,537.41 points, far from the low of the day (-2% to 6,424.97 points).
“The big news from the March stat is that underlying price pressures finally seem to be easingnotes Andrew Hunter of Capital Economics, for whom the March price rise will peak. † However, he adds that these figures do not reflect the plans of the fed to raise interest rates in 50 basis point increments, but “They reinforce our sense that after slowly realizing that the initial price hike was not transient, Fed officials are now being a little too pessimistic about how quickly it will fall.”
Hammer blow to the economy
The recent rise in inflation has prompted the more moderate members of the Fed’s monetary policy committee (FOMC) to believe that swift and strong action was needed to counteract the price rises. Charles Evans, the president of the Chicago Fed, long regarded as one of the most “moderate” within the FOMC, believed that accelerating the pace of rate hikes to fight inflation should be debated.
Fed Governor Christopher Waller, meanwhile, said the central bank is doing everything it can to prevent monetary tightening from stifling growth. Indeed, he described interest rate hikes as a tool to ” Brute force “ can have the effect of a “hammer” by causing “collateral damage” on the economy. For now, the market expects a 50 basis point hike in Fed Funds interest rates during the next two meetings of the Fed’s monetary policy committee.
According to the latest monthly Bank of America Securities survey of fund managers, investor optimism about global economic growth is at an all-time low, while fears of high inflation coupled with sluggish activity have been at an all-time high since August 2008.
Start of lockdown easing at Shanghai
This Tuesday the prices are from oil- rise again, the price of Brent increase from 7% to $105 a barrel on allegations that Russian forces used chemical weapons against the besieged city of Mariupol and also boosted by the decision of the Chinayesterday, to facilitate detention in certain districts of the city of Shanghai.
On this latest information, the shares of luxury companies LVMH and Hermes end at Cac 40. LVMH will publish its turnover for the first quarter just after the close of the stock exchange.
Other way around, Societe Generalewanted yesterday in response to the bank’s decision to withdraw from Russia, closed nearly 2% lower on Tuesday. The European banking sector was under general pressure in the stock market today, German Bank and Commerzbank close on declines of more than 8%. Mysterious investor sold tens of millions of shares which amounts to an interest of more than 5% of the capital of the two German banks for a total amount estimated at 1.75 billion euros.
Biggest drop in the Cac 40, Sanofi (-2.8%) suffered some profit-taking after its all-time high yesterday.
the tester Eurofins Scientific also finished at the bottom of the table while, in the same sector, bioMerieux lost almost 6% in response to publication of quarterly turnover of 837 million euros “in organic decline of 4.5%, we see within the financial analysis agency Midcap Partners, slightly below consensus expectations (840.5 million) on a demanding comparative basis (+16.5%)”which unsurprisingly reflects the impact of declining demand for Covid testing.
