European Stock Exchanges Rise at the Start of the Week, Further Slowdown of the U.S. Economy Expected

On European stock exchanges, stock prices rose on Monday morning, primarily due to a correction following last week’s sharp decline.

The STOXX 600 index of leading European stocks was up 0.3 percent at 9:30 AM, after falling more than 2 percent last week.

This morning, the London FTSE index strengthened by 0.20 percent to 8,165 points, while the Frankfurt DAX rose by 0.56 percent to 18,106 points, and the Paris CAC increased by 0.60 percent to 7,548 points.

The rise in the index is mainly attributed to the correction of stock prices, after they sharply fell last week due to political uncertainty in France.

Namely, French President Emmanuel Macron has called for extraordinary parliamentary elections at the end of the month, after the far-right party of Marine Le Pen recently won the European elections.

Meanwhile, stock prices on Asian exchanges fell. The MSCI index of Asia-Pacific stocks, excluding Japan, was down 0.2 percent at 9:30 AM.

The Japanese Nikkei index plunged by 1.8 percent, while stock prices in Australia, South Korea, and Shanghai slid between 0.3 and 0.5 percent. In Hong Kong, however, they slightly increased.

There is uncertainty in Chinese markets as investors were disappointed by weaker-than-expected data on industrial production and investment growth in May.

However, retail sales increased more than expected, but this did not particularly encourage investors as it is clear that hopes for a strong recovery of the world’s second-largest economy this year will not materialize.

Additionally, the Chinese central bank left interest rates unchanged, disappointing those who were hoping for new stimulus measures.

On most other exchanges in the region, stock prices fell this morning as it seems that the U.S. central bank will keep interest rates at elevated levels longer than expected, given that inflation in the U.S. continues to remain significantly above the Fed’s target levels.

This means that the growth of the U.S. economy, the largest export market for Asian companies, could further slow down.

Some central banks, including the European one, have recently begun a cycle of interest rate cuts to stimulate the economy, but as inflation worldwide remains relatively high, it is unlikely that rates will be significantly reduced this year.