CAC40: May Ends with No Trend and a Zero Score
May 31, 2024 at 10:26 am EDT
The CAC40 has remained virtually stable since the start of the morning, hovering around a pivot point of **7,980Pts** (zero performance for the month of May, negative by -1.5% over the past week). The week’s most eagerly-awaited figure, the US PCE index (and, incidentally, Eurozone inflation), is proving to be a non-event, insofar as its publication leads to barely measurable variations in stock indices, and frankly marginal variations in bonds.
Wall Street has just reopened in the green – for the symbol – with indices up a handful of points (**S&P500** at **5,238**, i.e. +4.4% in May, **Nasdaq** at **16,750**, i.e. +7% over the past month), while T-Bonds have also eased by a handful of basis points, with the 10-year at **4.50%** versus **4.554%** on Thursday (the consensus for a 1st rate cut in September has been raised from 45% to 50%).
The PCE price index – the most closely watched by the Fed – showed annual inflation for April to be stable compared with March, at **2.7%** gross and **2.8%** core (or underlying excluding energy and food), in line with consensus.
The Commerce Department, which publishes these figures, also reported that US household spending rose by **0.2%** in April compared with the previous month (+2.65%/1 year), while incomes rose by **0.3%** (in line with expectations). There were also inflation figures for Europe: France’s provisional CPI inflation estimate for May was unchanged at **+2.2%**.
Investors also took note this morning of price trends in the eurozone as a whole: the CPI is estimated at **2.6%** in May 2024, reflecting an acceleration in consumer price inflation after a rate of **2.4%** the previous month, according to Eurostat’s “flash estimate”.
These data will not dispel any doubts that the ECB will skip its rate-cutting turn at next Thursday’s ECB monetary policy meeting, especially as German inflation, unveiled on Wednesday, came in at a poor **+2.4%** overall and **+3%** underlying.
Capital Economics does not believe that the May hike will dissuade the ECB from cutting rates next week, given that it is due to temporary factors, but warns that a pause in July ‘now seems more likely’.
The reaction of currency traders seems more cautious, however: the euro is back up **+0.4%** against the dollar at **1.0875**.
Meanwhile, in Paris stock news, Renault Group announces the official launch of HORSE Powertrain Limited, its 50/50 joint venture with Chinese manufacturer Geely, specializing in engines and transmissions.
Sanofi reports that the CHMP of the European Medicines Agency has adopted a positive opinion on the approval of its Dupixent in the EU as an add-on maintenance treatment for chronic obstructive pulmonary disease.
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