An increase of around 50 points is looming on the Paris Stock Exchange, with attention shifting from the situation in the Middle East to corporate results, which are very numerous this week, and American statistics, which will give an overview of the future direction of the central bank’s monetary policy.
Iran downplayed the likely Israeli strikes against its territory on Friday morning, indicating its intention not to respond. With the risk of open war between the two enemy countries receding, safe haven values and oil prices are declining. Wall Street is expected to recover after a 3% fall for the S&P 500 last week, the biggest for the benchmark index since March 2023.
Beyond geopolitics, it is the hawkish comments of several Federal Reserve officials, questioning the need to lower the level of interest rates this year, which are worrying. This is not without causing tensions for bond yields. Nvidia’s price plunged 10% on Friday and wiped out more than $200 billion in capitalization, its worst session since March 2020.
All eyes will be on US GDP and PCE at the end of the week
Data released later this week should help sharpen expectations about the Fed’s monetary policy in the coming months, with the first estimate of economic growth for January-March and its preferred inflation measure for March . A figure higher than expected for the PCE index could lead markets to no longer bet on an initial easing in September, as is currently the case, with a probability of 64%, according to the CME Group’s FedWatch tool.
“ Robust growth is good news for everyone if inflation continues to slow. Otherwise, that’s bad news, because it means the Fed would have to put more effort into fighting inflation by keeping monetary policy tight enough to slow the economy and possibly push it into recession”, comments Ipek Ozkardeskaya from Swissquote. “Therefore, the combination of growth and inflation will give investors the next indication of how far the Fed is from its first rate cut “.
American tech companies had better not disappoint
It’s a busy week on the corporate results front, including sales of Kering, Airbus, BNP Paribas in Paris but also several of the American “Magnificent Seven”. According to Bloomberg Intelligence, profits of Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms and Tesla are expected to have increased by 38% during the first quarter. Excluding these companies, S&P 500 profits are expected to decline by 3.9%.
In French company news this Monday, the real estate group Icade confirmed its annual financial objectives and announced an increase in its activity in the first quarter. Over the first three months of the year, its IFRS turnover stood at 322 million euros, up 12.3% year-on-year.
Alstom has announced the sale of its conventional signaling business in North America, for around 630 million euros, as part of an agreement with the German group Knorr-Bremse AG.
The specialist in cryogenic membranes for the transport of liquefied natural gas GTT published a sharp increase in turnover in the first quarter and announced the appointment of Jean-Baptiste Choimet to the position of general manager.
Eurofins Scientific is rated as a buy by HSBC analysts, who are targeting a target price of 70 euros.
