Paris gains 0.18% and London advances by 0.57%, while Frankfurt finishes in balance (+0.01%). Over the week, however, these three stock markets are in decline. In Zurich, the SMI increased by 1.10%.
World stock markets moved in mixed order on Friday during a hesitant session, with the market wondering about the timetable for rate cuts from the European and American central banks after the publication of inflation data during the session.
In Europe, the Paris Stock Exchange gained 0.18% and London advanced 0.57%, while Frankfurt finished in balance (+0.01%). Over the week, however, these three stock markets are in decline. In Zurich, the SMI gained 1.10%.
In New York, Wall Street’s three main indexes were heading in different directions. Around 4:05 p.m. GMT, the Nasdaq dropped 1.40%, the S&P lost 0.64%, while the Dow Jones was stable (+0.05%).
The market is digesting the PCE index published on Friday for the month of April. Indicator of American inflation favored by the central bank of the United States (Fed), this index came out in line with market expectations.
Inflation remained stable in April in the United States, at 0.3% over one month and 2.7% over one year, as expected. So-called core inflation, which excludes volatile food and energy prices, was also stable in April over one year, at 2.8%, but slowed down over one month, to 0.2 %.
“The fact that underlying inflation continues to fall, albeit slowly, and that it is no longer so far from 2% eliminates the possibility of a return to rate hikes by the Fed, but that is not enough to that it is rushing towards declines,” commented Bastien Drut, head of strategy and economic studies at CPR AM.
The surprise came from American household spending, which slowed significantly in April. They only increased by 0.2%, compared to 0.7% in March and 0.3% expected for April by economists.
“There is an overall slowdown in the United States, visible through the consumption figures, on company publications” and on “growth, with the downward revision on Thursday of American GDP in the first quarter,” he said. explained Guillaume Chaloin, director of equity management at Delubac AM.
“This is not exactly good news” since a “lack of growth coupled with inflation means that the Fed cannot immediately lower its rates,” he continued.
The market does not rule out the scenario of “stagflation”, that is to say inflation with economic activity which is not progressing, he pointed out.
The first part of the European session was also marked by the publication of inflation figures for the euro zone in May, which revealed an acceleration in price increases, greater than expected.
While these figures do not call into question the scenario of a first rate cut by the ECB following its monetary policy meeting next week, they do however remove the likelihood of a second cut in July.
On the foreign exchange market, the euro gained 0.19% against the greenback, to 1.0852 dollars per euro, around 4:00 p.m. GMT.
On the bond market, Germany’s ten-year interest rate reached 2.66% and remained, as the day before, at the highest since November. The interest rate on the ten-year US government bond fell to 4.50% compared to 4.55% at the close the day before.
Trump Media falls on Wall Street
The day after the verdict in the trial of Donald Trump, found guilty of the 34 charges against him, the media group of the former American president lost 9.66% in New York around 4:05 p.m. GMT.
Atos awaits its verdict
The rescuer of Atos should be known “by the end of the weekend”, while discussions continue between the candidates for the takeover of the French IT giant, heavily in debt, and its creditors.
Atos posted the worst decline in the broader pan-European Stoxx 600 index: its stock dropped 14.92%, ending at 1.67 euros and hitting its lowest closing level.
On the side of oil and bitcoin
Around 4:00 p.m. GMT, the price of a barrel of Brent from the North Sea, for delivery in July, dropped 0.26%, to $81.65. That of West Texas Intermediate (WTI), for delivery the same month, was worth $77.27 (-0.82%).
Bitcoin lost 1.63% to $67,354.
