Paris Stock Exchange displayed resilience, with losses limited to between -0.9% and -1% amid US market downturns, as the S&P 500 and Nasdaq dropped significantly. Consumer confidence in the US fell more than expected, with bipartisan pessimism about economic conditions. The PCE price index remained steady, while yields decreased. Upcoming customs tariffs may heighten market volatility, and commodities saw mixed results, with gold reaching new highs and oil prices slightly falling.
Paris Stock Exchange Shows Resilience Amidst US Market Struggles
The Paris Stock Exchange managed to curtail its losses, hovering between -0.9% and -1% near the 7,925 mark during the final trading session of a week defined by significant corrections in US stock indices. This follows a mild start, where losses were initially reported at -0.5%. The S&P 500 fell by 1.5%, settling around 5,600, while the Nasdaq experienced a 2% drop, landing at approximately 17,450. These fluctuations highlight ongoing concerns stemming from disappointing consumer sentiment data and escalating tariff discussions.
Consumer Confidence Dips and Economic Outlook Deteriorates
Additionally, the Euro-Stoxx50 recorded a decline of 0.8% to 5,340, reflecting a weekly decrease of 2.4%, similar to what was observed with the CAC40. The DAX also fell by 0.7%, a trend that appears unexpected in light of Wall Street’s performance. American consumer confidence has shown a sharper decline than anticipated for March, according to the final results from the University of Michigan’s monthly survey. The confidence index dropped to 57 from 64.7 in February, revised down from an earlier estimate of 57.9. While the sub-index reflecting consumer assessment of their current situation only slightly decreased to 63.8, expectations plummeted to 52.6 from 64 in February.
Interestingly, the survey reveals that Republicans and Democrats alike are equally pessimistic about their financial prospects, economic conditions, unemployment, and inflation. A staggering two-thirds of participants foresee rising unemployment in the coming year, marking the highest level of concern since 2009. Inflation expectations for the next year have also climbed to 5%, up from 4.3% the previous month, showcasing a deteriorating outlook across the political spectrum. Despite earlier hopes for optimism following statistics released today, the market remains subdued, influenced by threats from Donald Trump towards foreign automobile manufacturers.
The closely monitored PCE price index, as reported by the Department of Commerce, held steady at a 2.5% year-on-year increase for February, consistent with January’s figures. When food and energy are excluded, the annual growth rate accelerated slightly to 2.8%. Furthermore, household consumption expenditures rose by 0.4% in February compared to the previous month, falling short of Jefferies’ expectations, despite a robust income growth of 0.8% month-on-month.
Looking ahead, the upcoming week, which transitions from March to April, is anticipated to bring renewed volatility, particularly with the official announcement of new customs surcharges by the Trump administration scheduled for Wednesday. In the currency markets, minimal changes are noted, although today’s indicators may lead investors to reassess their interest rate expectations in the US. The euro has gained 0.3% against the dollar, now trading around $1.0825.
US yields are experiencing a notable decline following the PCE report, easing by 8.5 points to approximately 4.285%. Meanwhile, Bunds decreased by 4 points to 2.726%, and OATs dropped by 3 points to 3.432%, with BTPs also reflecting a similar decline at 3.842%. On the commodities front, gold has reached a new high at $3,086 per ounce, and silver is approaching $34.5. Oil prices have dipped following a recent uptick linked to geopolitical tensions in the Middle East, yet they are projected to close the week with comfortable gains. Brent crude has retreated by 0.3% to $73.9 per barrel, while West Texas Intermediate (WTI) crude has fallen by 0.4% to $69.6.