Global stock markets retreat after week under tension – 05/26/2023 at 22:31

Global stock markets rose on Friday after a tumultuous week, with daily indicators of US economic activity highlighting its resilience even as inflation rose again.

Wall Street ended higher, buoyed by hopes of a near-term agreement on debt ceiling increases: the Dow Jones gained 1.00% and the S&P 500 1.30%. After its 1.71% jump on Thursday, led by Nvidia’s advance, the Nasdaq jumped 2.19%, reaching its highest level of the year on Friday.

The New York stock market “rose on the announcement” that Republicans and Democrats “will soon announce an agreement that will make it possible to avoid default”, began Peter Cardillo, of Spartan Capital.

European indices also ended the week higher. Paris took 1.24%, London 0.74%, Frankfurt 1.20% and Milan 1.16%. However, they are all very low for the week.

Inflation in the United States, which had been declining for several months, began to rise again in April, for a year and more than a month, according to the PCE report published on Friday by the Commerce Department and which is favored by the Reserve. Federal (Fed).

“Investors may have overestimated the pace of inflation” and the time it will take to bring inflation back to around 2%, the central bank’s target, insists Craig Erlam, an analyst at Oanda.

US household income also rose 0.4%, compared to 0.3% in March. As for consumption, it increased strongly again: +0.8% against +0.1% last month.

Consumer confidence ended May with a smaller drop than the University of Michigan’s first estimate, according to data released Friday.

With operations showing “remarkable resilience” according to Mr. Erlam and inflation are still stubborn, the possibility that the central bank of the United States will continue to raise rates in its next meeting remains in the minds of investors.

“Today’s inflation number confounds the idea of ​​a pause in rate hikes,” Peter Cardillo said when the Fed met on June 13-14. “It is not completely ruled out, but it will be a short break and the Fed will revisit the issue in July,” added the Spartan Capital analyst.

In the bond market, sovereign yields were steady after rising over the past two weeks that pushed them closer to their mid-March highs.

In the United States, the teams of the Democratic President Joe Biden and the negotiators of the Republican camp continue to try to find a compromise to increase the level of the American debt.

“We’re closer (to an agreement) but it’s not done yet,” said a source close to the discussions, casting doubt however on the possibility of an announcement on Friday.

Fine for Volkswagen

Automakers Volkswagen (+1.17%) and Audi (owned by Volkswagen) will be fined $85 million (79 million euros) in Texas for violating environmental regulations following the stolen engine scandal, Attorney General Ken Paxton said Thursday night. . , citing the agreement reached by the two companies regarding the case. Contacted by AFP, the group declined to respond.

Commodities and Coins

Oil prices rose again on Friday after falling the day before.

The price of a barrel of Brent North Sea oil for July delivery gained 0.90% to close at $76.95.

Its US equivalent, West Texas Intermediate (WTI) which expires the same month, took 1.16%, to 72.67 dollars.

The dollar was marking a period after earlier hitting multi-month highs against the yen or euro.

At around 7:45 pm GMT, the greenback fell 0.03% against the other currency, at $1.0728 per euro.

Bitcoin gained 1.10% to $26,780.

Wall Street will be closed Monday to observe the Memorial Day holiday.

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