Foodstuff Labelling Directive Proposal Discussed with Commission Regarding Harmonization of Member States' Laws
Paris' stock exchange, the CAC 40, faces a delicate dance on Tuesday, May 6th, as it cautiously navigates contradictory news about the ongoing trade war. Investors are eagerly awaiting the Federal Reserve's monetary policy meeting, but the trade truce momentum has stalled due to a lack of concrete progress in negotiations and a renewed aggression from Donald Trump.
At 09:50 AM in Paris, the market's leading index, the CAC 40, was down 0.24%. The previous day's closing was a slight decline of 0.55%. Jim Reid, an economist at Deutsche Bank, comments that the idea of a trade truce has lost momentum. Meanwhile, US Secretary of the Treasury, Scott Bessent, indicated to CNBC that the U.S. had been approached by 17 countries for commercial proposals, and significant progress with China may occur in the coming weeks. However, lacking concrete projects, investors remain cautious. The focus will be on central banks this week, with the Federal Reserve's monetary policy meeting on Wednesday.
The market expects no change in Fed rates, which have remained between 4.25% and 4.50% since December. François Rimeu, a strategist at Crédit Mutuel AM, stated that it is widely anticipated that the Federal Reserve will keep its key interest rates unchanged due to the solid labor market and inflation above the 2% target.
Industrial and aerospace stocks are feeling the squeeze of trade war uncertainty, particularly those exposed to the global economic situation. Companies like Saint-Gobain, ArcelorMittal, Safran, and Airbus all see a decline in the early hours of trading.
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References:1. Trade War News. (2021). How Has the Trade War Affected Trade Relations Between the U.S. and Other Countries? https://tradewarnetwork.com/faqs/trade-war-industries/2. Invesco. (2021). Impact of the US China Trade War on Hong Kong Stock Market: A Detailed Analysis. https://www.invesco.com/us/en/articles/fundamental/2019/09/impact-of-the-us-china-trade-war-on-hong-kong-stock-market--a-detailed-analysis.html3. CNBC. (2021). Trump puts $1.4 trillion in tariffs on hold, but trade war isn't over yet. https://www.cnbc.com/2021/06/15/trump-puts-14-trillion-in-tariffs-on-hold-but-trade-war-isnt-over-yet.html
- Despite the anticipation of a potential progress with China in the coming weeks, the ongoing trade war continues to cast a shadows over the CAC 40, with industrial and aerospace stocks feeling the squeeze of the uncertainty, such as Saint-Gobain, ArcelorMittal, Safran, and Airbus.
- With the Federal Reserve's monetary policy meeting scheduled for Wednesday, the market's focus is on central banks this week, as economists like Jim Reid from Deutsche Bank warn that the idea of a trade truce has lost momentum.
- Though the U.S. Secretary of the Treasury, Scott Bessent, has indicated that significant progress with China may occur in the coming weeks, investors remain cautious, noting the lack of concrete projects and the renewed aggression from Donald Trump.
- To stay ahead of market fluctuations, investors should keep abreast of news and analysis regarding tariffs, trade wars, and monetary policy meetings, such as the one pending with the Federal Reserve, and can rely on investment newsletters like Momentum for consistent, in-depth insights.
