CAC40: -0.5%, reflects US indices on eve of FED FOMC meeting

(CercleFinance.com) - The Paris Bourse widened its losses (-0.
5%), penalized by Stellantis (-7.5%), Renault (-7.3%) and Téléperformance (-4%).

The Euro-Stoxx50 fell by -0.7% below 4,950, while Wall Street reopened down by -0.3% (S&P500) to -0.4% (Nasdaq) then -0.5% (Dow Jones).

On the eve of the May 1st bank holiday - which will see continental Europe's main stock markets remain closed - the day's trading session promises to be rich in economic statistics, starting with inflation on the Old Continent.

Eurozone annual inflation is estimated at 2.4% in April 2024, stable compared with March, according to a flash estimate published at 11am by Eurostat, the statistical office of the European Union.

Seasonally-adjusted GDP rose by 0.3% in the eurozone and the EU in the first quarter of 2024, compared with the previous quarter, according to the preliminary flash estimate published by Eurostat, the statistical office of the European Union.

Earlier in the morning, investors had taken note of France's gross domestic product (GDP), which grew moderately in the first quarter of 2024 (+0.2% after +0.1% in the previous quarter), according to the first estimate (seasonally and working-day adjusted) from INSEE, with inflation slowing to +2.2%.

In Germany, GDP grew by 0.2% in the first quarter of 2024 on a sequential basis, in volume and seasonally adjusted data, according to a first estimate from Destatis, following a 0.5% decline in the fourth quarter of 2023.
On the bond market, all the previous day's gains were lost, and then some: our OATs (+6.1pts to 3.085%) returned to their worst levels of the year, as did Bunds (+6.2% to 2.588%).... and on the other side of the Atlantic, T-Bonds rallied +5.5Pts to 4.669%.

The markets are still facing uncertainties surrounding the tone of the Fed's statement to be released tomorrow evening.

No rate changes are expected on this occasion, but market participants will be dissecting the language relating to inflation: this was almost unthinkable 3 months ago, but the hypothesis of zero rate cuts in 2024 and one hike in January 2025 (9 months from now) now attracts 33% of votes, while a 1st rate cut in September is marginally in the majority.
Recent weeks have clearly seen a spectacular downward revision of US rate cut expectations for 2024, from seven to potentially zero.
The Dollar has taken advantage of this to strengthen a little against the Euro this year (the Euro is down -0.2% to 1.0700, or -3% since January 1), and a lot against the Yen (-0.7%), which is down to 157.5/$ (-12% this year).

Brent crude oil consolidates by -0.6%, but remains anchored at or above $88 in London.

The session is also punctuated by numerous quarterly corporate publications on both sides of the Atlantic.

In the news for French companies, Air France-KLM reported a net loss of 480 million euros for the first three months of 2024, up 143 million year-on-year, with an operating margin down 2.5 points to -7.4%.

Stellantis reported this morning net sales of 41.7 billion euros for the first three months of the year, down 12% year-on-year. By way of comparison, consensus was expecting sales of around ?43.5 billion.

Thales reports sales of ?4,421m for the first quarter of 2024, compared with ?4,026m for the first quarter of 2023, up 9.8% on a reported basis, and 7.9% on a like-for-like basis.

Finally, Arnaud Lagardère, Chairman and CEO, today informed the directors of Lagardère SA that he has been placed under investigation. He is contesting the case and will appeal. This indictment essentially concerns facts relating to personal companies wholly owned by him, and does not involve any Lagardère Group company, according to the Group.

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