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While European stock markets suffered a massive sell-off due to doubts about France’s next fiscal regime, Wall Street ended this Thursday at new highs, after weak activity figures encouraged the prospect of rate cuts, on the day after the announcements of the Federal Reserve.
At the close of Europe, the continental Euro Stoxx 50 lost 1.97% and London’s FTSE 100 fell 0.63%. The rise of right-wing Marine Le Pen’s party ad portas of the general elections in France continues to affect the assets of the Old Continent. In both France and Germany, stock markets fell around 2%.
“French political uncertainty is weighing on the country’s bonds and the euro due to growing fiscal concerns,” Brown Brothers Harriman senior strategist Elias Haddad wrote in a note reported by Bloomberg. Long-term yields rose in France.
The poor investment environment left its mark in Chile, where the S&P IPSA fell 0.75% to 6,486.36 pointsespecially pressured by actions such as SQM-B (-2.14%) and Copec (-0.99%)which have a high internal weighting.
Market anticipates effect of rain on actions in the electricity sector and highlights momentum from Enel Chile
The American case
But the New York Stock Exchange finally managed to break through, in a session that was not without doubts. The Nasdaq Composite rose 0.39% and the S&P 500 gained 0.23%, both at new all-time highs. Less tied to the technology frenzy, the Dow Jones decreased 0.11%. Wall Street thus displays four consecutive records, with which the S&P 500 reached 5,433.74 points.
US bonds gained new demand and rates fell to two-month lowswhile financial derivatives show that The general expectation of two cuts in the official rate in 2024 is consolidatedan additional drop when compared to the projection sheet deployed yesterday by the Fed.
The new impulse originated this morning, just when Weaker than expected employment and producer price data were released. “Jobless claims show cracks in the labor market as inflation cools. The Fed has maintained its stance hawkish, but you must be careful not to fight your last battle. The case dovish is being built,” said TradeStation head of global markets strategy David Russell.
And at 1:00 p.m., the declines in yields on all tranches of US sovereign debt deepened, as the Treasury received strong demand in an auction of 30-year securities worth US$22 billion. A similar surprise was caused by a 10-year bond tender this week.
