Down 1.99% at the worst of the session, the Paris Stock Exchange erased most of its losses thanks to the surprise slowdown in inflation, excluding volatile elements, in the United States last month. Consumer prices rose by 1.2% over one month, as expected, and by 8.5% over one year, against 8.4% expected. In “core” data (excluding food and energy) the rise comes out at 0.3%, against 0.5% in February and an estimated 0.5%. On the bond market, the yield on the US 10-year bond eased 5 basis points to 2.72%, after reaching 2.83% for the first time since the end of 2018.
Around 4:15 p.m., the Bedroom 40 lost 0.17% to 6,544.51 points in a business volume of 2.1 billion euros. In New York, the Dow Jones gains 0.64% and the Nasdaq Composite 1.96%. The progression of American technologies is driving their European counterparts. In Paris, Dassault Systems gains 1.7% and Capgemini 0.8%, while STMicroelectronics erased its initial losses.
” The big news from the March statistic is that underlying price pressures finally appear to be easingreports Andrew Hunter of Capital Economics, for whom the rise in prices in March will mark a peak “. He adds that these figures should not alter the Fed’s plans for 50 basis point hikes in its interest rates, but ” they reinforce our feeling that after being slow to realize that the initial rise in prices was not transitory, Fed officials are now a little too pessimistic about how quickly it will fall back “.
Risk of collateral damage to the economy
The recent surge in inflation has prompted the most dovish members of the Fed’s Monetary Policy Committee (FOMC) to believe that we must act quickly and forcefully to counter the rise in prices. Long considered one of the most “dovish” within the FOMC, Charles Evans, the president of the Chicago Fed, considered that an acceleration of the pace of rate hikes to fight inflation must be debated.
Fed Governor Christopher Waller meanwhile said the central bank is doing all it can to prevent monetary tightening from stifling growth. Indeed, he described rate hikes as a tool of “ Brute force » which can have the effect of a « hammer » by causing « collateral damages on the economy. For now, the market is anticipating 50 basis point hikes in the fed funds rate during the next two meetings of the Fed’s monetary policy committee.
LVMH and Sanofi make the splits within the Cac 40
Recently weakened by containment measures in China, luxury stocks are moving forward in anticipation of an easing of health restrictions in Shanghai. LVMH and Hermes win 2.8% and 1.7% respectively.
Cyclic values also take on colors like Saint Gobain (+1.9%), Renault (+0.8%) and Michelin (+2%).
Biggest rise in the Cac 40 on Monday following the announcement of the sale of its banking and insurance activities in Russia, Societe Generale loses 1.7%.
Sanofi fell 3.5% under the effect of profit taking after posting a record the previous day.
bioMerieux loose 5.2%. Oddo BHF downgraded the title from “outperforming” to “neutral” after quarterly turnover in line with expectations. The broker notes that the group has confirmed its forecasts despite the risk of a more difficult year 2022 for sales of tests against Covid-19.