United States: employment, prices and the Fed

Wall Street remains oriented in the red for the time being, before trading on Thursday, after its fall the day before led by technology stocks. The S&P 500 fell another 0.7%, the Dow Jones 0.5% and the Nasdaq 1.1%. Yesterday evening, the technology index fell by 3.2% and the Dow Jones by more than 1%, following still worrying figures for US inflation, close to 41-year highs, leaving little room for Fed, forced to raise rates as quickly as possible.

On the Nymex on Thursday, a barrel of WTI crude lost 2% to $103.5. The ounce of gold consolidates by 0.2% to $1,849. The dollar index jumped 0.6% against a basket of benchmark currencies. Bitcoin stumbles towards $28,000.

Concerns about monetary tightening by central banks in a context of slowing activity are weighing heavily on risky assets. Yesterday’s US CPI (consumer price) data, however, is not considered alarming enough to move Fed rate hike expectations to 75 basis points, and there was little change in expectations. rate hike after the data. Nor is there much change in macroeconomic developments outside of the United States. ECB officials are increasingly comfortable with the idea of ​​a July rate hike. Sources indicated the possibility of three hikes by the end of the year. Swedish inflation meanwhile reached its highest level since 1991, supporting the Riksbank’s rate hike expectations.

Meanwhile, EU-UK relations are in the headlines after London considered dropping the Northern Ireland Protocol. This poses the risk of a trade war, with the EU likely to retaliate with tariffs imposed on the UK. Financial Times sources meanwhile said Chancellor Sunak was preparing a summer economic package for households.

In Ukraine, the latest reports suggest a pushback of Russian forces that could alter the momentum of the war. Finland finally announced today, as expected, its intention to join NATO “without delay”. Sweden should quickly follow the example of Helsinki.

On the economic front on Wall Street today, weekly jobless claims for the week ending May 7 will be released at 2:30 p.m. (FactSet consensus 200,000). The producer price index for the month of April will be revealed at the same time (consensus +0.5% compared to the previous month and +10.7% over one year; +0.6% and +8 .9% excluding food and energy). Mary Daly, president of the San Francisco Fed, will speak during the day.

In the news of American companies, Walt Disney corrects before market the day after its quarterly accounts, the market fearing difficulties in the development of streaming activities – despite new Disney + subscriptions exceeding expectations. The quarterly profits of the entertainment group came out a little short, but it is above all the anticipation of weaker growth in streaming that weighs. Rivian also published yesterday evening, and points up before the market after confirming its unit objectives. This Thursday, Alibaba, Motorola Solutions, Nio Inc, Citrix or Tapestry, announce their latest accounts.

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