At the end of a turbulent week for the markets due to American inflation statistics which continue on their slightly upward trend and company results without real catalysts, the technological stocks of the Nasdaq allowed the indices not to fall into the pessimism. The nervousness has increased in tone. While the meeting of the Federal Reserve (Fed) on 1er May will certainly confirm a status quo in American monetary policy, players will especially scrutinize the tone used by Jerome Powell to adjust their expectations of a first rate cut which seems to be continually moving away.
In the United States, the week began with private sector growth indicators which showed a slowdown in activity in April. Indeed, the S&P Global composite PMI index came out at 50.9 in flash estimation, compared to 52.1 in final data for the previous month. Even though it is still in an expansion zone, production is experiencing its weakest increase since the start of the year, due to reduced growth rates and a contraction in orders both in the manufacturing industry and in services.
At the end of the week, the publication of the PCE index showed that once again, prices increased slightly more than expected in March. In line with expectations, the PCE consumer price index increased by 0.3%, as in February. Over one year, the index increased by 2.7%, compared to 2.5% in February when 2.6% was expected.
In the euro zone, the dynamic is different. The composite ‘flash’ PMI showed that business activity grew in April at its fastest pace in almost a year, as a strong recovery in the services industry more than offset the sector’s slowdown. manufacturer. The indicator jumped to 51.4 this month, up from 50.3 in March and a consensus of 50.7. This is the second consecutive reading of the index above the threshold of 50 which separates growth from a contraction in activity.
Demand also differs in each of the two sectors. The services sector new business subindex rose to an 11-month high of 52.1, while the manufacturing new orders index fell to a four-month low, to 43.8 compared to 46.0 in March.
By adding a note of optimism brought by the job market with numbers growing at the fastest rate since June 2023, the planets now seem aligned for a first rate cut by the European Central Bank (ECB) during of its meeting on June 6.
This is how the S&P 500 index ended the week up 1.79%, the Nasdaq up 3.09% and the Stoxx Europe 600 up 0.38%.
