The mood is one of optimism on the markets. The Cac 40 should gain around 20 points at the opening. Although the world’s major central banks are unlikely to abandon their restrictive policy any time soon, the fact remains that a reduction in the level of their interest rates is more or less close, and even imminent for the ECB. The Frankfurt institution made it clear that the act was to take place this Thursday. It would then become the second G7 central bank to take the plunge after the Bank of Canada yesterday.
However, the future evolution of rates in the euro zone is uncertain, as is that of inflation. After a slightly faster-than-expected acceleration in the consumer price index in May, President Christine Lagarde is expected to emphasize a meeting-by-meeting approach. “ As economic momentum exceeds expectations and inflation proves difficult to control this year, the ECB can afford to go slowly and let the data define the parameters of the easing cycle “, Deutsche Bank economists wrote in a note to their clients. Analysts at Barclays, who expect easing in each quarter of 2024, anticipate a similar message. “ We also expect the Governing Council to reaffirm that it will continue to follow a data-driven approach, without committing in advance to a particular rate trajectory “.
The ECB press release, which will include its new inflation and economic growth projections, will be published at 2:15 p.m., before a press conference by Christine Lagarde at 2:45 p.m.
Nvidia second most valuable company in the world
Concerns about the world’s largest economy sparked by a lower-than-expected gauge of manufacturing activity earlier this week appear to have been overridden by additional signs of easing in the U.S. labor market, a key focus of Federal Reserve officials, at the same time title as the fall in inflation. Figures from ADP showed on Wednesday that private sector hiring slowed much more than expected last month. An indication published one day after the announcement of a greater than expected drop in job offers. “The labor market should no longer be considered a risk for inflation,” argue analysts at TD Securities. He also supports the Fed starting to ease in September if inflation continues to gradually normalize by then as we expect.” The official May employment report in the United States will be released tomorrow.
Wall Street closed yesterday on a good note, in particular the Nasdaq Composite, which gained almost 2% and posted a record. Nvidia was the driving force behind this progress, with an increase of 5.2% allowing it to overtake Apple to become the second largest market capitalization in the world (behind Microsoft) at $3.012 billion. “ As Nvidia bulldozes towards new highs, the question arises whether this price rally is justified. What is, in any case, is the sense of urgency that investors feel to be part of the AI dream. What is happening today is undoubtedly the digital equivalent of the industrial revolution. The opportunities are enormous, both at the enterprise and consumer levels, and Nvidia is aware of the growing demand and is keeping its foot on the accelerator », commented Ipek Ozkardeskaya, at Swissquote.
Fall in annual results at Rémy Cointreau
Among the companies listed in Paris, Rémy Cointreau indicated that it expected a gradual resumption of its activity during the financial year which will end at the end of March 2025 and that it intended to protect its profitability over this period, after a deterioration of its results in 2023-2024. The spirits group saw its net profit, group share, decline by 37.1% in published data compared to 2022-2023 and by 35.9% in organic data, to 184.8 million euros.
Atos announced that it is extending the deadline for the selection of a preferred financial restructuring proposal until early next week. The struggling digital services group has received two revised proposals, one from Daniel Kretinsky’s EP Equity Investment fund, in partnership with Attestor Limited, and the other from a consortium led by digital transformation specialist Onepoint, with Butler Industries, Econocom and a group of Atos creditors.
