(CercleFinance.com)-The stock market in Paris rose nearly 0.3% to around 6,270 points on the back of easing bond yields.
Investors seem reassured for the foreseeable future as long-term interest rate declines ease recurring concerns about the potential for aggressive rate hikes by central banks, a major risk factor in today’s market.
Market participants are wondering if the weakening global economy, which is increasingly embodied by the latest indicators, can slow down the monetary tightening cycle.
“Change, or even hope for change, can catalyze the recovery of stock markets and the economy, along with fiscal easing,” La Financière de l’Echiquier believes.
In the bond market, the yield on 10-year government bonds was stable at around 2.76% this morning as investors were forced to evacuate to long-term bonds due to the prospect of slowing growth.
In Europe, Germany’s 10-year bond, the true benchmark rate for the euro area, is 0.96%.
The outlook for the coming months remains bleak, but global growth is still expected to be 3.3% this year, and investors may gradually return to equities.
“When the horizon is clear, the best stock market transactions don’t happen, but conversely, when it’s particularly blocked,” recalls La Financière de l’Echiquier.
The “future” of the New York index also marks the beginning of Wall Street’s rise in which investors respond to statistics on durable consumer goods orders.
But above all, monetary policy issues will remain at the center of today’s debate with the evening release of the minutes of the Federal Reserve Board.
In this regard, investors will also follow the intervention of European Central Bank President Christine Lagarde at the Davos Economic Forum.
In her official blog, the ECB chief declared earlier this week that he hopes to “break out of negative interest rates” as early as September, along with the potential rise in key interest rates this fall. ..
Christine Lagarde seems to be increasingly cautious about communication and wants to prepare financial markets for a stage of “detoxification” that seems inevitable.
In the meantime, investors were able to notice a decline in French household confidence in May, but not as sharply as in March and April. At 86, the overall index calculated by INSEE fell by 1 point, well below the long term. average.
The balance of household opinions on past financial conditions has lost two points, and opinions on future financial conditions are stable. It is also less likely that you would recommend saving it.
As for the economic situation, households’ anxiety about the development of unemployment has diminished, and the view that prices will accelerate in the next 12 months has fallen sharply again.
In French company news, TotalEnergies announced the signing of a 50% acquisition of Clearway Energy Group (CEG), presented as the fifth American player in renewable energy, with Global Infrastructure Partners (GIP). ..
Stellantis has deepened its partnership with American Palantir, and the two groups are now planning to work together in areas such as the supply chain.
In addition, Stellantis and Samsung SDI have announced an investment of more than $ 2.5 billion in a joint venture to build a production plant for lithium-ion batteries for electric vehicles in Kokomo, Indiana, USA.
Finally, Manutan International announced a net profit of € 26.7 million, up 34.1% from 2021 to the first half of 2010, with a profit of € 439.7 million, up 11.8% from the end of March 2021. Growth accelerated in the second quarter. Quarterly (+ 18.1%).