“Markets React to Paris and Wall Street Closures While U.S. Debt Ceiling Vote Looms and Spanish Inflation Modestly Rises”

The Paris Stock Exchange, like yesterday, closed the session down. The Cac 40 lost 1.29%, to end at 7,209.75 points, while, on Wall Street, the indices are moving in scattered order. The Dow Jones of major industrial stocks lost 0.45% while the Nasdaq Composite of technology companies rose 0.6%, supported by the new record of Nvidia (+5%), which becomes the ninth company to cross the milestone of 1,000 billion dollars of capitalization. The graphics chip designer presented last week growth forecasts boosted by the strong potential linked to artificial intelligence.

Joe Biden and Kevin McCarthy, the Republican Speaker of the House of Representatives, reached an agreement this weekend on an increase in the debt ceiling. But it still needs to be approved by both houses of Congress. Several parliamentarians among the most right-wing of the Grand Old Party (GOP) have already made it known that they would reject this agreement.

The 99-page bipartisan text supposed to suspend the debt ceiling until January 1, 2025 must now be voted on by the House of Representatives tomorrow, before being submitted to the Senate in order to avoid a possible default on June 5.

For Goldman Sachs strategists, the “deal” should be approved by both chambers by Friday, or even this weekend, although a limited risk remains. Jim Reid at Deutsche Bank points out that“There’s not much room for error, but with moderates on both sides seemingly aligned, there may be a vocal minority on either side against the deal, which could still pass.”

Still in the United States, consumer confidence deteriorated in May, with the index established by the Conference Board falling to 102.3 points after 103.7 in April. But the consensus formed by Bloomberg was counting on a more marked decline to 99 points. Other major events of the week include the Fed’s Beige Book tomorrow and the May jobs report on Friday.

Inflation: the Spanish exception?

The risk that central banks will maintain durably restrictive monetary policies due to persistent inflation also limits initiatives on the market. In Spain, consumer prices rose 2.9% year on year in May, their weakest rise since July 2021, after rising 3.8% in April.

“The sharp decline in inflation in Spain this year mirrors the rapid increase in the previous year, both due to a faster transmission from wholesale energy prices to consumer prices. than in most other countries., says Andrew Kenningham of Capital Economics. He also indicates that this moderation of inflation in Spain “largely reflects country-specific factors that may not be replicated by others for several months.” Inflation figures for the euro zone as a whole will be published on Thursday.