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A flash crash took place on Monday morning, dragging the European stock markets into an air pocket.
On Monday 2 May, a flash crash occurred on the European market, and in particular the Nordic market. The Stockholm stock exchange was one of the hardest hit as its benchmark index lost nearly 7% in five minutes before recovering. In Paris, the CAC 40 lost up to 3.5% at the time of the air pocket and lost 1.66% by the end of the day.
While the event may have been a result of poor order execution or trader error, global markets have been sinking into the red for several weeks. In Paris, the CAC 40 lost nearly 10% in just three months and in April, the US market had its worst month in two years.
Before the opening on Tuesday 3 May, the Paris Stock Exchange was slightly up. But this is still insufficient to make up for the decline at the beginning of the week. Investors are looking ahead to the U.S. Federal Reserve meeting tomorrow, Wednesday, May 4.
“Central banks are under pressure to combat rising inflationary pressures,” explains Michael Hewson, analyst at CMC Markets. Indeed, inflation reached 8.5% in March on a yearly basis in the United States according to the CPI index, and the Fed must use the big means to contain it and avoid a vicious inflationary circle. Almost all investors are therefore expecting a half-percentage point increase in key rates to between 0.75% and 1%, which would be a first for the Fed, which has not made such a move in 20 years. This rapid rate hike will mean more expensive debt repayments and more expensive investments as well, which should make investors even more worried.
The reason? Confinements have resumed in China in metropolises such as Shanghai, Beijing and Shenzhen, disrupting production. There is significant activity in the 2020 covid-19 period. These confinements lead to a collapse in Chinese demand, as consumers stay home. The Ukrainian conflict, on the other hand, weighs on commodity prices and slows the economy while allowing inflation.
Finally, the European Union’s sixth round of sanctions against Russia will include the withdrawal of “other banks” from the Swift transaction system, a key cog in the wheel of global finance, its top foreign affairs representative, Josep Borrell, said Monday in Panama.
Read also > NO STATE OF GRACE IN THE STOCK MARKET: THE CAC 40 FALLS BY 1.8% AT THE OPENING
Featured photo : © Freepik[/vc_column_text][/vc_column][/vc_row][vc_row njt-role=”not-logged-in”][vc_column][vc_column_text]
A flash crash took place on Monday morning, dragging the European stock markets into an air pocket.
On Monday 2 May, a flash crash occurred on the European market, and in particular the Nordic market. The Stockholm stock exchange was one of the hardest hit as its benchmark index lost nearly 7% in five minutes before recovering. In Paris, the CAC 40 lost up to 3.5% at the time of the air pocket and lost 1.66% by the end of the day.
While the event may have been a result of poor order execution or trader error, global markets have been sinking into the red for several weeks. In Paris, the CAC 40 lost nearly 10% in just three months and in April, the US market had its worst month in two years.
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A flash crash took place on Monday morning, dragging the European stock markets into an air pocket.
On Monday 2 May, a flash crash occurred on the European market, and in particular the Nordic market. The Stockholm stock exchange was one of the hardest hit as its benchmark index lost nearly 7% in five minutes before recovering. In Paris, the CAC 40 lost up to 3.5% at the time of the air pocket and lost 1.66% by the end of the day.
While the event may have been a result of poor order execution or trader error, global markets have been sinking into the red for several weeks. In Paris, the CAC 40 lost nearly 10% in just three months and in April, the US market had its worst month in two years.
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