Positive data from purchasing managers’ indices in the Eurozone did not significantly impact the stock market, which remained lackluster with main indices slightly up. Milan rose by 0.29%, following four consecutive sessions of decline, resulting in a weekly decrease of 2.37%. London remained unchanged, while Paris and Frankfurt saw increases of around 0.3%. The composite index in the Eurozone rose to 52.3 in May, up from 51.7 in April and surpassing expectations of 52.0. While services remained stable, manufacturing showed improvement but still remained below 50, the threshold indicating contraction or expansion.
Another important data point was released this morning: negotiated wages in the 20 Eurozone countries increased by 4.69% in the first quarter, following a 4.45% increase in the previous three months. This data, released by the European Central Bank (ECB), is closely monitored as it influences inflation figures. ECB President Christine Lagarde expressed confidence that inflation is under control, and a rate cut in June is expected, with uncertainty surrounding later meetings in 2024. Unemployment also remains a concern, with current levels showing a slight decrease.
Overnight, the highly anticipated quarterly report from Nvidia was released, seen as a key indicator of global demand for services and AI chips. The company’s revenue increased by 18% in the quarter and by 262% compared to the previous year, surpassing expectations. As a result, the stock rose by 6.9% in after-hours trading and has seen a 150% increase over the past year. Positive trends were also observed in the European tech sector, with companies like ASML and BE Semiconductor Industries showing gains.
The energy sector is under observation, with gas prices continuing to strengthen, surpassing 35 euros per megawatt-hour, representing a 17% increase in a week. This comes after Vienna sounded the alarm about a potential disruption in Russian gas supplies to Austria. Additionally, oil prices have rebounded above 82 dollars per barrel, following recent lows in February. These fluctuations in energy markets can have broader economic implications and are closely monitored by investors for potential impacts on various industries.
In conclusion, while positive data from purchasing managers’ indices and rising wages in the Eurozone indicate some economic stability, uncertainties remain regarding inflation, interest rates, and geopolitical developments that could impact markets in the future. The performance of key sectors such as technology and energy will continue to be closely watched for signals about global economic trends. Investors should remain vigilant and adaptable in response to changing market conditions to mitigate risks and capitalize on opportunities for growth. The ongoing COVID-19 pandemic and its implications on global supply chains and consumer behavior also add a layer of complexity to the economic outlook, requiring a nuanced approach to investment decisions.
