Concerns about the outlook for the global economy continue to haunt the markets, and the recent turmoil in stock indices reflects high volatility, prompting investors to overreact to the slightest good news. But global sentiment remains pessimistic amid rampant inflation and monetary tightening by major central banks.
In New York, the S&P 500 fell 2% on Tuesday and the Nasdaq Composite nearly 3%, while Asian markets followed this morning. The Chinese CSI 300 is down almost 1% as the close approaches. While the quarantine period for travelers entering the country has been halved, some point out that the actual reopening of activities still depends on the zero Covid policy still in place.
The prospect of a recession haunts the markets, and Jerome Powell acknowledged that one cannot be ruled out in the United States. This is evidenced by the latest indicator of consumer confidence in the US, which fell to a 16-month low in June.
Levels Rarely Seen Outside of Recessions
” Days are repeated and look the same from the side of economic indicators. This time around, the business climate of the Federal Reserve Bank of Richmond and Dallas, as well as the Conference Board consumer confidence indicators, reversed sharply in June and dropped to levels rarely seen outside of a recession. “, noted Thomas Bauer and Véronique Riches-Flores of Riches Flores Research.
Fed officials are trying to minimize this risk. New York Fed President John Williams and his San Francisco counterpart Mary Daly acknowledged the need to lower inflation, insisting that a soft landing economy is still possible.
Closer to home, Christine Lagarde confirmed that she expects European Central Bank key rates to be raised by 25 basis points in July and indicated that the Governing Council stands ready to step up its action if necessary. Jerome Powell, Christine Lagarde, Bank of England Governor Andrew Bailey and Cleveland Fed President Loretta Mester are scheduled to speak at the ECB’s annual forum in Sintra, Portugal, on Wednesday.
The macroeconomic agenda is dominated by the first assessment of consumer prices in Germany in June, as well as the latest release of data on US GDP growth in the first quarter. These two indicators will be published at 14:00 and 14:30 respectively, following a series of indicators on economic sentiment and consumer confidence in the euro area.
New boss for EssilorLuxottica
Ipsen announced that the Food and Drug Administration, a U.S. health authority, has given priority review to an application for approval of the investigational drug palovarotene for the treatment of patients with fibrodysplasia ossificans progressive (FOP).
EssilorLuxottica. The Board of Directors has appointed Francesco Milleri, current managing director of a manufacturer of corrective lenses and optical instruments, as chairman. This appointment follows the death on Monday of Leonardo Del Vecchio.
Eurasian announced the sale of 51% of the capital it still owned to US Trader Interactive, based on a valuation of $1.9 billion (1.8 billion euros).
Among analyst ratings, Exane BNP Paribas downgraded stellantis from “excellent” to “neutral”.