Equity markets returned to the upside last week, driven by reassuring macroeconomic data, particularly regarding recent inflation trends. The prospect of lower interest rates also supported the rebound.
Thus, the publication of the “core CPI” inflation figure came out up 0.27% in August against 0.20% expected. On an annual basis, the progression of the index in August is however in line with expectations, up 3.2% as in July.
The inflation shock now seems to be over and at the next meeting of the Federal Reserve (Fed) (September 18), the institution could confirm this by a significant reduction in its key rates (50 basis points) in order to show that it is now entering a phase of normalization of its monetary policy.
The US labor market, meanwhile, continues to send negative signals. For example, the Labor Department recorded 230,000 new unemployment claims during the week of September 2, an increase of 2,000 from the previous week (which was revised upwards from 227,000 to 228,000).
Finally, the number of people regularly receiving benefits increased by 5,000 to 1,850,000 during the week of August 26, the most recent period available for this statistic.
In Europe, the European Central Bank (ECB) has, as expected, lowered its key rates by a quarter of a point, thus easing its monetary policy in the face of an economic context that remains difficult. In detail, the ECB’s deposit facility rate will increase to 3.50%.
ECB President Christine Lagarde has once again confirmed that the institution will remain sensitive to the evolution of macroeconomic data, which suggests a further rate cut in December.
Over the week, the S&P 500 gained 4.02%, while the Nasdaq ended up 5.95% and the Stoxx Europe 600 increased by 1.85%.
