Paris, France – The iShares MSCI France ETF (EWQ) is currently experiencing its worst trading week in over two years. Shares of the EWQ have plummeted more than 9% this week, marking the fund’s most significant decline since March 4, 2022, when it dropped by 12.9%. The ETF saw a further decline of around 3.4% during morning trading on Friday.
Alongside the EWQ, France’s CAC 40 Index is also facing its worst week since March 4, 2022, with a 6.4% plunge this week. Political uncertainty in France, highlighted by President Emmanuel Macron’s decision to dissolve parliament and call for snap elections on Sunday, is contributing to the market’s instability. Macron has stated that he will not resign if his party faces defeat in the elections, further adding to the uncertainty swirling in the country.
In economic news, a recent University of Michigan Survey of Consumers revealed unexpected consumer sentiment decline in June. This decrease in sentiment could push the Federal Reserve towards adopting a more dovish stance, especially amidst concerns about the labor market and persistently high inflation levels.
On a more positive note, Nvidia outperformed tech giants Apple and Microsoft on Friday, narrowing the market cap gap between them. Nvidia’s performance could impact a tech ETF significantly, potentially leading to a demand surge of more than $10 billion worth of Nvidia shares due to index rebalancing rules.
Additionally, the equity market has been rallying to new highs this year. The S&P 500 has surged by 13.92% in 2024, the Nasdaq Composite by 17.69%, and the Nasdaq 100 by 16.35%. These gains have been propelled by a series of record highs hit by major stock indexes throughout the year.
In other news, outgoing Cleveland Federal Reserve President Loretta Mester expressed confidence in the current state of monetary policy, emphasizing the need to monitor inflation data closely before considering any changes. Mester emphasized the importance of public service during her 39-year tenure with the Fed, underlining the apolitical nature of the institution’s decision-making process.
The Bank of Japan’s recent decision to keep its benchmark interest rate unchanged while mulling over reducing its Japanese government bond purchases signals the central bank’s cautious approach to policy changes. This decision comes amidst economic uncertainties and market fluctuations, with the yen weakening against the U.S. dollar post-announcement.
In conclusion, the financial markets remain dynamic, reacting to various economic indicators, political developments, and global events. Investors and analysts will continue to monitor these developments closely to navigate the evolving landscape of the financial world.
