Paris takes 0.43%, Frankfurt 0.54% and Milan 0.56%, while London is weighed down by its values linked to raw materials and loses 0.45%. In Zurich, the SMI gains 0.14%.
Stock markets rose on Monday, supported by good retail sales figures in the United States and the absence of escalation, at this stage, in the Middle East, after Iran’s air attack on Israel .
The European stock markets finished in disorganized order: Paris gained 0.43%, Frankfurt 0.54%, Milan 0.56%, while London was weighed down by its values linked to raw materials, such as oil, and lost 0.45%. In Zurich, the SMI gained 0.14%.
However, they had experienced momentum mid-session, driven by retail sales in the United States in March, which increased more than expected by analysts.
In addition, February sales were revised upwards, to +0.9% compared to +0.6% initially announced, a sign that consumption in the world’s largest economy is doing well.
Wall Street, too, started the day well, relying on this statistic. But around 4:10 p.m. GMT, the Dow Jones was up only 0.38%, the Nasdaq index 0.12% and the broader S&P 500 index 0.31%.
However, given these figures, “there is no urgency to lower rates” for the Fed according to Bastien Drut, head of strategy and economic studies at CPR AM.
“For the Fed, the conditions for a reduction in short-term rates do not seem to be met, because GDP growth is strong, the unemployment rate is low and inflation is still far from the target” of 2%, confirms Eymane Cherfa, analyst at Myria AM.
In response, sovereign interest rates are climbing on the bond market: that of the ten-year United States bond stands at 4.63% around 4:05 p.m. GMT, the highest since November 2023, against 4.52 % at the close on Friday. The yield on two-year American bonds rose from 4.90% on Friday to 4.95%.
The better than expected results of the investment bank Goldman Sachs, whose shares jumped 3.55% in New York, support investor morale at the start of a busy week of company publications.
Renewed tensions in the Middle East
Iran launched a massive attack on the night of Saturday to Sunday against Israel, in response to a strike against its consulate in Damascus. Israel, under very strong international pressure, is waiting for its decision on a possible response, while calls for de-escalation are increasing in order to avoid a conflagration in the region.
Eymane Cherfa, analyst at Myria AM, however, underlines “a feeling of calm on the financial markets today”.
“The stock market is now betting that Israel will choose a diplomatic response rather than a military response and that a war in the region can be avoided,” said Konstantin Oldenburger, at CMC Markets.
Oil prices were thus falling around 4:05 p.m. GMT: the price of a barrel of Brent from the North Sea for delivery in June fell 1.40% to 89.18 dollars and a barrel of American West Texas Intermediate (WTI), with expiring in May, dropped 1.37%, to 84.47 dollars.
This context supports the prices of companies in the defense sector: in Paris, Dassault Aviation rose by 1.46% and Thales by 0.79%. In Milan, Leonardo gained 2.31% and in Frankfurt, Rheinmetall advanced 1.58%. In London, BAE Systems took 1.44% and in New York, Lockheed Martin gained 1.33%.
Lufthansa crashes its forecast
Conversely, the leading European airline group Lufthansa (-4.59% in Frankfurt) lowered its operating profit forecasts for 2024, citing “still unpredictable” effects in the Middle East and after a first quarter with a loss of 849 million euros, weighed down by strikes.
Tesla stalls
Tesla fell by 2.87% while several media outlets cited an internal letter sent by Elon Musk to the manufacturer’s employees announcing the upcoming layoff of more than 10% of the workforce.
On the side of gold and currencies
On the foreign exchange market, the euro was stable against the dollar at 1.0643 dollars per euro around 4:05 p.m. GMT.
Gold, which reached a new record on Friday, was trading at $2,350.34 (+0.25%).
Bitcoin gained 1.30% to $64,692.
