(BFM Bourse) – The CAC saved 8,000 points at the last minute on Friday evening but lost 0.63% over the whole of a crucial week. Recent American statistics showing persistent inflation and a rise in geopolitical tensions have clearly weighed on investor morale.
Once again, the mood in Paris has shifted into the red with the opening of the American markets. The CAC 40 thus closed down 0.16% to 8,010.83 points on Friday evening, after having been a hair’s breadth away from finishing its run below the threshold of 8,000 points. Which would have been unprecedented since March 6.
Despite everything, the flagship Parisian index lost 0.63% over the whole of a week which was crucial for the markets. It therefore continues a second week in negative territory.
However in Europe, the latest figures in Germany and France confirm a decline in inflation. This Friday, German inflation for March was confirmed at 2.2% year-on-year in March, its lowest level since May 2021. In France, the second estimate for March from INSEE showed an increase in prices of 2.3% over one year, a figure consistent with the first assessment.
This would validate market expectations of a rate cut from the European Central Bank next June. “The ECB continues to signal the start of rate cuts this summer, provided that inflation trends and labor market conditions align with expectations,” summarizes Grupreet Garewal of Goldman Sachs Asset Management.
The ECB ready to draw before the Fed
In the United States, the trend is much less clear, and doubts are still allowed after the one-year inflation expectations contained in the latest monthly survey from the University of Michigan, which also shows a deterioration in American household morale. .
One-year inflation expectations stand at 3.1% at the start of April compared to 2.9% in March. Those over a five-year horizon stood at 3%, compared to 2.8% in March. Another statistic showing the persistence of inflation, the American import price index which increased by 0.4% over one month in March. This is the third monthly increase in a row for this index.
In this context, investors are less optimistic about the trajectory of US Federal Reserve rates. According to the CME Fedwatch tool, markets are betting on fewer than two rate cuts in 2024.
“The door closes on a rate cut as early as June, barring a sharp reversal in inflation data. We now expect two rate cuts of 25 basis points this year, in July and December “, estimates Xiao Cui, Senior Economist, at Pictet Wealth Management.
Moreover, these inflationary risks are pointed out by Jamie Dimon, the president of JPMorgan, who expects lower interest income in 2024. These prospects tarnish the very good publication of the first major bank in the United States which is therefore losing ground on the stock market.
“Looking ahead, we remain alert to a significant number of uncertain forces,” he said, citing “a large number of persistent inflationary pressures, which could continue.”
The start of the publication season in the United States is not as flamboyant as hoped. The results of American banks came out mixed, including those of JPMorgan which lost almost 5%
Societe Generale continues sales
On the value side, Société Générale sits at the top of the CAC 40 (+2.10%) after announcing a second divestment project in 24 hours, with the sale of two subsidiaries in Morocco for an amount of 745 million euros.
Just behind, we find Totalenergies which gained 2.05% in the wake of the rise in oil prices, themselves supported by geopolitical risk with fears of contagion from the war between Israel and Hamas to Iran. The June North Sea Brent contract advanced 1.35% to $90.95 per barrel, while the May contract for WTI listed in New York jumped 1.6% to $86.38 per barrel. .
Imerys gained 2.3% after announcing the creation of a new “solutions for the energy transition” branch which brings together already existing activities.
At the smaller value level, Riber, specializing in molecular beam epitaxy, an important technology for semiconductors, gained 6.5% after the publication of its 2023 results and its outlook for 2024.
On other markets, the euro fell by 0.8% against the dollar to 1.0645 dollars, the market gaining confidence in the fact that the ECB will lower its rates before the Fed.
Sabrina Sadgui – ©2024 BFM Bourse