2023-06-12 17:11:32
Paris takes 0.52%, Frankfurt 0.93% and London, penalized by raw materials, only 0.11%. In Zurich, the SMI rose by 0.42%.
Global stock markets rose slightly as Wall Street kept its momentum amid hopes that the US Federal Reserve would leave its key interest rate unchanged after Wednesday’s meeting, the first since March 2022.
Wall Street continued its bullish momentum: the Dow Jones gained 0.17%, the S&P 500 0.34% and the Nasdaq 0.69% around 4:20 p.m. GMT.
In Europe, less festive for three weeks, the financial markets ended on a modest rise, offsetting a good part of their decline of the past week. Paris gained 0.52%, Frankfurt 0.93% and London, penalized by commodities, only gained 0.11%. In Zurich, the SMI gained 0.42%.
In the United States, “we have experienced a turning point”, explains Jack Ablin, of Cresset Capital, who attributes this pivot to recent indicators which showed that the American economy and inflation were decelerating, without activity stalling for as much.
“The fear was that inflation would remain high and that the Fed would continue to raise its rates, undermining profitability and growth” of companies, recalled the analyst. “But now, investors see the light at the end of the tunnel”, namely the imminent end of the cycle of monetary tightening and the ebb of inflation.
All investors’ attention is on the meeting of the American Federal Reserve (Fed) on Tuesday and Wednesday and that of the European Central Bank (ECB) on Thursday.
The latest consumer price index figures for May in the United States will be scrutinized on Tuesday, in order to gauge the current price dynamics, with inflation still remaining strong in the world’s largest economy.
A surprise in this publication could however change the decision of the institution, estimates Ilana Azuelos-Bossard, manager of Kiplink Finance.
However, even if no new increase in the Fed’s key rates is announced this week, several economists are warning that the monetary institution could raise them again at the next meeting, at the end of July.
Later in the week, the European Central Bank and that of Japan also meet. The ECB, which started its cycle of rate hikes later than the Fed, is expected to raise them again, while signaling that it does not intend to stop there, even if inflation recedes and the euro zone went into recession.
The Bank of Japan is expected to maintain the status quo.
The bond market was not very lively either, with sovereign debt interest rates rising slightly, to 2.38% for the German 10-year bond against 2.37% on Friday and 3.77% for the American equivalent versus 3.74%.
Estate in question
After the announcement of death of former Italian Prime Minister Silvio Berlusconi, the title of his group MediaForEurope (MFE, ex-Mediaset) jumped. The “A” share, which gives the right to one vote at the General Meeting of Shareholders, gained 5.86% and the “B” share, which is worth ten votes, by 2.32%, against a backdrop of speculation about the company’s future.
Interest rates on Italian government bonds fell more than the rest of European rates. That of the ten-year debt was worth 4.05%, against 4.11% at the close on Friday.
Cruise passengers take off
cruise lines took off on Wall Street, supported by an increase in recommendation from analysts at Bank of America and JPMorgan, encouraged by the high level of reservations and fares.
Norwegian (+8.16%), Carnival (+14.01%) and Royal Caribbean (+2.19%), the three giants of the sector, pranced.
On the side of oil and currencies
Oil prices are faltering as investors fear that a possible Fed rate hike will weigh on economic activity and hence demand for crude.
Around 4:10 p.m. GMT, a barrel of Brent from the North Sea, for delivery in August, lost 3.12% to 72.45 dollars. Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in July, yielded 3.56% to 67.67 dollars.
On the currency side, the euro was stable (-0.03%) at 1.0745 dollars for one euro.
Bitcoin lost 1.03% to $25,870.
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