Between the Stock Exchange and the ECB, it’s now a vague love affair, market news

The Paris Stock Exchange will end this week shortened over the Easter weekend to a small gain following the European Central Bank’s status quo on its interest rates. The ECB confirmed in a press release that it intends to end the asset purchase program (APP) in the third quarter, without further details. The lack of a horizon for real currency tightening explained the rise in European markets on Thursday, while American indices declined overall. On the other hand, in the foreign exchange market, the reaction was the opposite: the euro, below 1%, fell below the 1.08 dollar bar, the lowest level since May 2020.

Cac 40 closed the session with a gain of 0.72% to 6,589.35 points. Investors, however, have limited initiatives because the stock market is closed tomorrow, Good Friday, and Easter Monday.

“At the beginning or at the end”

During the traditional press conference following the meeting of European central bankers, Christine Lagarde, President of the ECB, was no more specific this afternoon, contented herself with pointing out that the asset purchase program should stop. “at the beginning or end of the third trimester”, the debate remains open within the Board of Governors. As for the question of a rate hike, it will come a few hours after the end of the APP, according to the ECB statement, an idea that means “a period of a week to several months”reported to the President of the ECB in response to a question.

In general, Christine Lagarde, who is more accustomed to lowering the stock market than raising it with her statements, warns that the Ukraine war is weighing on confidence and that rising energy prices have affected demand and production. As a result, growth remained weak in the first quarter, and will remain slow in the coming months as the risks of a slowdown in growth have increased significantly. Inflation risks, on the other hand, have risen sharply and early signs that inflation expectations are overshooting the target need to be watched.

Economists are now waiting for the June meeting and new economic projects from the ECB to find out more.

Elsewhere, the trend is tightening

The trend is mostly toward tightening money, even in the United States, Canada, Brazil, New Zealand and, more recently, in South Korea and Singapore. The Fed has already raised its interests by a quarter point to fight inflation and is preparing to raise it by mid -point in May and June.

In March, rising U.S. consumer prices fell on “core” data, which did not include the rapid evolution of food and energy, giving hope that inflation would rise. Or rather, gives hope. Because yesterday, with the release of the Producer Price Index, which showed a historic runaway in costs (the PPI rose 11.2% in March), economists are no longer sure that consumer prices will not rise further. .

Contrary to the general trend, the Chinese authorities for their part clearly indicated yesterday that they are considering measures to support the activity, which may include reducing the rate of compulsory reserves for large banks to revive. in an economy. due to the outbreak of Covid-19 infections.

Hermès on the rise, Nike backs Dow Jones

On Wall Street, the Nasdaq index of technology stocks, which had the most losses from rising interest rates, lost 1%, even as the stocks Twitter sought, while Elon Musk offers to buy the social network for 43 billion dollars (You are here on the other hand lose more than 3%). The S&P 500 also declined, while the Dow Jones rose 0.4%, supported in particular by gains of more than 5% in Nike, the bank UBS strongly recommends buying parts of the sports equipment manufacturer. On Wall Street, we can also notice the growth of banks Goldman Sachs, Morgan Stanley and Citigroup after publishing their quarterly accounts, while Wells Fargo, which also makes its copy, fell more than 6%.

In this part of the Atlantic, Hermes (+ 2.7%) reported sales growth of more than 30% in the first quarter, higher than analysts had expected. Earlier this week, LVMH (+ 0.9%) has already beaten market expectations.

Publicis gained 1.8% after a very quick session. The advertising group reported organic growth of 10.5% in the first quarter, beating analysts ’expectations, but did not raise its forecast for the full year due to economic uncertainty.

Largest increase in Cac 40, EssilorLuxottica closed with a profit of more than 3%. Morgan Stanley raised its price target from 190 to 195 euros while maintaining its opinion of “overweight”.

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