EU stock markets weak at the start, fears about global growth return

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(Il Sole 24 Ore Radiocor) – In the aftermath of an anonymous session, a slow start to the session for the European stock exchanges, while worries about the trend of the economy and inflation return to the market. Weighing on market sentiment are the disappointing data from China, with industrial production rising much less than expected in April, a sign that the world‘s largest economy is struggling to regain the pace of growth. Eyes focused today on the second estimate of European GDP for the first quarter, but also on the German Zew index for May. So they go down the FTSE MIB of Milan, the CAC 40 of Paris, the DAX 40 of Frankfurt, the FT-SE 100 of London, theIBEX 35 of Madrid andAEX in Amsterdam.

In a context of concern for global growth, attention also remains high on inflation, observed especially to understand the next moves of the central banks. To follow, in the afternoon, the speech of the ECB President Lagarde. On the currency side, the euro was weak against the dollar at 1.086. Oil moved little with Brent at 75.3 dollars a barrel, gas marks a first price at 32.69 euros per MWh in Amsterdam.

Debt ceiling node, USA at risk of default

Investor attention, however, is focused on the United States, where Republicans and Democrats must agree on theraising the public debt ceiling, under penalty of closure of the state apparatus, to the detriment of businesses and families. According to Treasury Secretary Janet Yellen, the United States they could default on June 1st if the debt ceiling is not raised. Waiting until the last minute to act could have serious consequences for business and consumer confidence. “We still estimate that the Treasury will likely be unable to meet all government obligations unless Congress takes action to raise or suspend the debt limit by early June, and potentially as early as June 1,” Yellen writes. , following up on the letter already sent to Congress on May 1st.

Tokyo closes higher, Chinese markets mixed

The Nikkei index on the Tokyo Stock Exchange closed today’s trading session up 0.73%, at 29,842.99 points. Intraday high at 29,916.56 points, low at 29,779.07 points. The Chinese stock exchanges return to mixed trading, remaining around parity: the Shanghai Composite index drops 0.02%, to 3,310.16 points, while that of Shenzhen marks an increase of 0.01%, to 2,033.99 . As for the Hong Kong Stock Exchange, the session opens in positive territory: the Hang Seng index rises by 1.06%, reaching 20,183.28 points.

Industrial production rises in China, but below estimates

Industrial production in China rose 5.6% on an annual basis, up from 3.9% in March, but about half of analysts’ estimates at +10.9%, due to weak external demand. The economic recovery is still unstable: retail sales, thanks to the Golden Week holiday, jumped by 18.4% (+10.6% in March), but less than the 21% expected. Urban unemployment drops to 5.2% (from 5.3% in March), with the youth component (16-24 years) soaring to a record 20.4% (from 19.6% in the previous month). Investments in fixed assets are holding back: +4.7% in January-April, against +5.1% in the first quarter and +5.5% expected.
Meanwhile, Ford plans to cut future investments in China, according to the FT, while the US automaker’s CEO warned that there is “no guarantee” that Western automakers can win against local vehicle rivals. electric. The company will “put less capital at risk” by focusing on commercial vehicles, such as delivery vans, and instead use the market as a “listening point” to better understand battery technology.

Appointments on the agenda

Today’s agenda includes a series of data that give an indication of how global growth will hold up. It’s coming to Europe‘indica, which measures the expectations of analysts and institutional investors about the German economy. The consensus of economists predicts a sharp decline in May, both for the current situation and for the future. Eurostat, on the other hand, disseminates the GDP of the Eurozone for the first quarter, which according to estimates should remain stable at 1.3% on an annual basis. The EU Commission, however, yesterday revised upwards the figure for the whole of 2023 to 1.1% and 1.6% for 2024 (for Italy, respectively, to 1.2% and all ‘1.1%).

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