Wed May 01, 2024 ▪
4
min reading ▪ by
Fenelon L.
The Paris Stock Exchange posted a negative monthly balance sheet of -2% and accentuated its decline, penalized by the disappointing results of Stellantis (-9.2%), Renault (-6%) and Téléperformance (-5%). The uncertainty surrounding the Fed’s monetary policy is also weighing on investor confidence.
European markets in negative territory in April
The Paris Stock Exchange ended April in the red, with a drop of -2%, like the Euro-Stoxx50. On the other side of the Atlantic, Wall Street is showing relative resilience, despite the Nasdaq falling below 16,000 points.
This correction comes after five months of uninterrupted rise, but does not represent a major reversal of trend, with technology stocks doing better than resisting the tightening of financing conditions.
Today’s economic indicators showed stable inflation in the euro zone at 2.4% in April, while GDP grew by 0.3% in the first quarter, both in the euro zone and in the EU. In France, growth is modest (+0.2%) and inflation decelerates to +2.2%, while in Germany, GDP increased by 0.2% after a contraction of 0.5% in fourth quarter 2023.
On the debt market, sovereign rates are tightening, with OATs at 3.085%, Bunds at 2.588% and Italian BTPs at 3.879%. Across the Atlantic, T-Bonds rose to 4.669% and the 2-year rate to 5.023%.
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Fed uncertainties weigh on markets
The markets remain focused on the Fed press release expected today evening, although no rate change is anticipated. Investors will scrutinize the language relating to inflation, with a downward revision of expectations of rate cuts for 2024. Now, 33% of stakeholders do not anticipate any reduction this year and are even considering an increase in January 2025.
In this environment, the greenback appreciated against the euro (-0.2% towards 1.0700) and the yen (-0.7% towards 157.5/$). The barrel of Brent fell by -0.8% but remained above $88 in London.
On the corporate front, Air France-KLM saw its net loss widen to 480 million euros in the first quarter, while Stellantis disappointed with a turnover down 12% to 41.7 billion euros. Conversely, Thales posted growth of 9.8% to 4.421 billion euros.
In conclusion, the month of April ended in the red for the European stock markets, penalized by disappointments in the results of several heavyweights and the uncertainty surrounding the Fed’s monetary policy.
Despite resilient growth and contained inflation in Europe, investors remain on guard against the prospects of monetary tightening. The Fed’s next announcements will be decisive for the direction of the markets in the weeks to come.
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Fenelon L.
Passionate about Bitcoin, I like to explore the intricacies of blockchain and cryptos and I share my discoveries with the community. My dream is to live in a world where privacy and financial freedom are guaranteed for everyone, and I firmly believe that Bitcoin is the tool that can make this possible.
