Stock exchanges, Wall Street closes at record levels. Milan +0.6%.
Wall Street closed at record levels, with all 3 major indices at all-time highs: Dow Jones +0.88%, Nasdaq +1.40% and S&P 500 +1.17%.
by Giorgia Colucci and Stefania Blasioli
4' min read
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(Il Sole 24 Ore Radiocor) - The US inflation figure, in line with expectations, boosts hopes for a cut in the summer by the Fed. TheEuropean stock exchanges thus closed on a positive note, with the Milan Ftse Mib up 0.61% above 35,000 points, while Frankfurt, Paris and London, back in the record area since the beginning of the week, also closed today at all-time highs. Also fuelling the buying, explained Filippo Diodovich, Senior Market Strategist at IG Italy, were disappointing retail sales numbers, the main factor influencing US GDP. After declines in March, they remained stable in April, increasing "the likelihood that some Fed members will vote for an early cut in July," says the analyst. At the moment, the market predicts a 70 per cent probability of the first easing of the cost of money in the US in September.
On the European front, good news comes from the Eurostat estimates on inflation, expected in 2024 at 2.5% in the Eurozone and in 2025 falling to 2.1%, i.e. close to the ECB's target.
Meanwhile, Wall Street closed at record levels, with all three major indices at all-time highs, after the latest consumer price report showed a drop in inflation in April. The Dow Jones rose 0.88% to 39,908 points, the Nasdaq gained 1.40% to 16,742.39 points while the S&P 500 advanced 1.17% to 5308.15 points.
Wall Street up after weak Cpi inflation rise
Wall Street up after weak rise in CPI inflation. Consumer prices in the US rose 0.3 per cent from the previous month, following +0.4 per cent in March, against expectations for a confirmation of 0.4 per cent. The annual figure fell from 3.5% to 3.4%, in line with estimates. The 'core' figure, i.e. excluding food and energy prices, rose by 0.3%, in line with expectations, after three consecutive increases of 0.4%. Compared to a year earlier, the 'core' figure rose by 3.6%, again in line with expectations, the smallest increase since April 2021. Energy prices rose by 2.6 per cent year-on-year, food prices by 2.2 per cent. On Wednesday, however, producer prices, up 0.5% from the previous month, against expectations for a 0.3% rise, had caused some concern, with an annual rise of 2.2%, in line with estimates, the largest increase since April 2023. Now, however, the market has become more optimistic about the Federal Reserve's moves and expects an interest rate cut of about 50 basis points during 2024.
ECB: Villeroy, most likely rate cut in June
It is very likely that the ECB will start cutting the cost of money at its next meeting on 6 June in Frankfurt. This was said by the governor of the Bank of France, Francois Villeroy de Galhau, in an interview with the radio station Rtl in which he emphasised that, barring unforeseen developments, the ECB is ready to start cutting interest rates with an initial intervention at the June meeting. Villeroy also explained that in the Governing Council some governors are pushing for a more cautious attitude after the first cut in June to ensure that the disinflationary path towards the 2 per cent target continues smoothly.
