Short-term optimism in European markets

  •   20/05/2020 - 14h01
  •   DEHOUI Lionel

The optimism observed on Monday at the level of the various stock exchanges in Europe would have been short-lived. They find themselves downhill this Tuesday after the momentum displayed on Monday. A boost possible thanks to the support for the European recovery programme that France and Germany are expected to provide jointly. They were also supported by hopes of finding an effective vaccine against coronavirus. The values of this Tuesday are just a few palpable examples.

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Short-term optimism in European markets
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Clues in Europe and Wall Street

At around 09:40 GMT, the FTSE, Dax and CAC 40 were down 0.33% in London, 0.34% in Frankfurt and finally 0.72% in Paris respectively. Also, the EuroStoxx 50 (Eurozone), Stoxx 600 and FTSEurofirst 300 indices all declined by 0.39%, 0.66% and 0.71% respectively. Monday was the best session for European stock exchanges in over 8 weeks.

On Wall Street, the S&P-500 finished Monday with a very high value never recorded in 10 weeks. A feat achieved mainly thanks to the publication of a probable happy outcome of a study. Notably the one carried out by the Moderna laboratory concerning an experimental vaccine in the fight against Covid-19. It is a reality that has not failed to attract comments.


Economic analysis by Vincent Boy

Through a note, the specialist in economic analysis Vincent Boy (IG France) treats the hope raised by the result of the non-proportional study. According to him, the publication of such a result does not provide the solution to financial difficulties. For he finds that it is these difficulties that guide the evolution of the financial markets. Vincent Boy writes that it will take multiple quarters to develop such a vaccine while the effects of containment continue to be felt.

In addition, it states that the recovery will continue to operate slowly. In addition, to help the countries most affected by Covid-19, Paris and Berlin have made a proposal of 500 billion euros. This is the total amount needed for the stimulus package they have proposed as budgetary spending. On this subject, analyst Michael Hewson (CMC Markets) finds that this program cannot be considered a definitive agreement.

Information: In reality, the 27 countries supporting the European Union will have to approve in advance while financing this programme. So it's going to be difficult, according to Michael Hewson. Currently, all eyes are on the hearing of US Federal Reserve Chairman Jerome Powell. He will be joined by U.S. Treasury Secretary Steven Mnuchin. It concerns the economic replica of the United States.


Some results of the day

On the European stock market, the automotive sector saw its Stoxx index fall by 1.61%. This came about as a result of the decline in new vehicle distribution on the old continent during the month of April. Distributions were down a record -78.3% due to containment provisions. Paris car market giants such as Renault and PSA fell by 4.98% and 5.79% respectively.

Fiat Chrysler and Volkswagen followed suit with sales of 2.05% and 0.84% respectively. As for Remy Cointreau, he recorded a larger loss estimated at more than 5.30%. Eurofins Scientific is down 6.97% with the issue of more than one million new shares. The ThyssenKrupp group achieves a gain of 4.53% following its partnership search statements.