(CercleFinance.com) – The Paris Stock Exchange accelerates its fall and drops -1.7%, below 7,100 Pts (at 7,090) during this 3rd session of decline in a row.
The CAC40 is back to its levels of March 28, nearly 500pts below its peaks of April 19 (7,581).
The euro-Stoxx50 is not better off with -1.6% at 4,220 Pts: an important short-term support is broken.
With these last 3 sessions completely against the tide of ‘macro’ news, the (calendar) month of May should end with a loss of more than 3%.
On Wall Street, the decline is only 0.8% on the S&P or the Nasdaq after a wind of euphoria blew in May on the ‘technos’: ‘May finally turned out to be a very interesting month , with huge gains for technology stocks (such as Nvidia with +40% in May, +175% since January 1) and a decline in defensive stocks, unless something unlikely happens today’, comment the Danske Bank teams.
A decisive vote is expected today in the House of Representatives, where the Republicans have the majority, before the project is submitted Friday to the Senate, which is controlled by the Democrats.
Time is running out, as the Treasury Department estimates that ‘X date’ – by which the government will run out of cash – is Monday, June 5.
The gloom in the market is quite paradoxical this Wednesday insofar as the risk of a ‘shutdown’ by June 5 has been ruled out by 90% in the United States, while the inflation figures for the day are reassuring.
The inflation rate in Germany (CPI) fell to 6.1% according to the Federal Statistics Office (after +7.2% and +7.4% observed respectively in April and March).
The slowdown in annual inflation would have been helped by a rise of only 2.6% in energy prices, thanks to a base effect linked to their surge last year under the effect of the Russian attack on Ukraine.
‘The difficulty of the moment is to bring together enough elements to relaunch the progression of the Parisian index’, recognize analysts at Kiplink Finance.
In France, inflation slowed to 5.1%, marking a sharp deceleration after +5.9% the previous month.
Growth (GDP) in the 1st quarter came out at 0.2% (no recession, unlike Germany) according to detailed CVS-CJO data from INSEE, after a stagnation observed in the last quarter of last year.
Figures below consensus, such as those unveiled in Spain yesterday, could encourage a further decline in government bond yields and allay fears about European Central Bank (ECB) rates.
German Bunds fell -7Pts to 2.27%, our OATs erased -6Pts to 2.842%, US T-Bonds -4.2Pts to 3.66%.
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