Weekly house view | Macron’s gamble

Weekly house view | Macron’s gamble

The CIO's view of the week ahead.

The week in review

US equity indexes rose last week, with the S&P 500[i] up 1.6% and the Nasdaq[ii] up 3.3% (both indexes in USD). Some prominent tech-related names were at the forefront of gains, while stocks more generally benefited from soft US inflation numbers. But European indexes had a harder time following the European Parliament elections and the calling of a snap election in France. The CAC 40[iii] fell 6.2% on the week, dragged down by banking stocks, while the Stoxx Europe 600[iv] declined 2.35% (both indexes in euros). While the Fed remained somewhat uncommitted on the pace of rate cuts, inflation news was considered good enough to trigger a bond rally, with the 10-year US Treasury yield down 22 bps on the week and 10-year Bund yields down even more. But French bond spreads over Bunds rose on election uncertainties combined with France’s existing deficit problems. Elsewhere, the Bank of Japan’s announcement that it would curtail its bond buying pushed Japanese bond yields lower. Yet the yen continued to lose ground against the USD, in part due to a lack of details on the BoJ’s plans.  The euro fell against the USD, Swiss franc and British pound on the French election call.

Quote of the week

"The institutions are clear, the place of the president is clear, and it is also clear whatever the result,"

— French President Emmanuel Macron said, ruling out the scenario of resigning in the event of defeat at legislative elections.

Key data

The US consumer price index (CPI) was essentially flat from a month before in May and was up 3.3% year-on-year (y-o-y) compared with 3.4% y-o-y in April. The core CPI was 3.3% y-o-y in May, down from 3.4% in April. China’s headline CPI unchanged at 0.3% y-o-y in May, while PPI was -1.4%. Chinese industrial production rose at an annual 5.6% in May, down from 6.7% in April, but retail sales grew 3.7% y-o-y, up from 2.3% in April. Industrial production in the euro area declined 0.1% in April from the previous month, a significant change from the 0.5% growth registered in March. Industrial production declined at an y-o-y rate of 1.0% in April.

[i] Source: Pictet WM AA&MR, Thomson Reuters. Past performance, S&P 500 Composite (net 12-month return in USD): 2019, 31.5%; 2020, 18.4%; 2021, 28.7%; 2022,  -18.1%; 2023, 26.3%.
[ii] Source: Pictet WM AA&MR, Thomson  Reuters. Past performance, Nasdaq  Composite (net 12-month return in USD):  2019, 36.7%; 2020, 44.9%; 2021, 22.2%;  2022, -32.5%; 2023, 44.6%.
[iii] Source: Pictet WM AA&MR, Thomson Reuters. Past performance, STOXX Europe 600 (net 12-month return in EUR): 2019, 30.5%; 2020, -5%; 2021, 31.9%; 2022,  -6.7%; 2023, 20.1%.
[iv] Source: Pictet WM AA&MR, Thomson Reuters. Past performance, STOXX Europe 600 (net 12-month return in EUR): 2019, 27.6%; 2020, -1.5%; 2021, 25.5%; 2022, -10.1%; 2023, 16.5%.
Confermare il proprio profilo
Confermare il proprio profilo per continuare
Oppure selezionare un profilo diverso
Confirm your selection
By clicking on “Continue”, you acknowledge that you will be redirected to the local website you selected for services available in your region. Please consult the legal notice for detailed local legal requirements applicable to your country. Or you may pursue your current visit by clicking on the “Cancel” button.

Benvenuto in Pictet

Ci sembra che lei sia in: {{CountryName}}. Vuole modificare la sua ubicazione?