(Bloomberg) — The stock market is ending the week on a sour note after disappointing US economic data, with traders also shunning riskier assets amid worries that a political crisis in France is deepening.
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US equities trimmed this week’s rally as a gauge of consumer sentiment unexpectedly fell to a seven-month low as high prices continued to take a toll on views of personal finances. While the market continued to price in about two rate cuts this year, Federal Reserve Bank of Cleveland President Loretta Mester said she would like to see a few more months of good inflation data before considering easing policy.
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“While we on Wall Street obsess about the inflation rate of change, many consumers could care less and are still struggling with the cumulative rise relative to their wage growth,” said Peter Boockvar the Boock Report. “The bottom line is simply the inflation squeeze that lower and middle income consumers are feeling.”
Traders rushed to the safest corners on the market on Friday, with French shares this week losing roughly $200 billion in market capitalization — about the size of Greece’s economy — following President Emmanuel Macron’s decision to call a snap election. The nation’s bonds were at the heart of the rout, with the premium that investors demand to own 10-year debt over safer German peers heading for the biggest weekly surge on record.
“The situation in Europe is starting to get a little dicey,” said Matt Maley at Miller Tabak + Co. “The move is still a long way from developing into another sovereign debt crisis, but with concerns about sky-high sovereign debt levels and bloated budgets, the developments in Europe (and particularly France) are raising some concerns in the marketplace.”
The S&P 500 dropped to around 5,410. The Stoxx Europe 600 fell 1%. France’s CAC 40 Index extended losses to over 6% on the week, heading for its biggest slide in the span since March 2022. The slump put the nation at risk of losing its crown as the largest…
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