CAC 40: With new hope on the American debt, the CAC 40 finally limits its decline to 2.3% over the week
(BFM Bourse) – The Parisian index closed Friday’s session up 1.2%, buoyed by new hopes of a favorable outcome on the US debt issue. This progression allows him to save a little the furniture over the whole week, which made him lose all the same 2.3%.
Who would’ve believed that. Negotiations on the American debt ceiling, the main source of anxiety in the markets, made it possible, this Friday, to limit the breakage over the whole of a gloomy week on the Paris Stock Exchange. Almost stable at midday, the Parisian market regained energy in the afternoon, supported by new hopes of a favorable outcome on this thorny issue of American debt which has haunted the markets for several sessions.
The CAC 40 closed up 1.24% above 7,300 points to 7,319.18 points. However, this last-minute burst of pride is insufficient to erase a difficult week. On a weekly basis, it fell by 2.3% against 3.4% at midday.
Quoted by washington post, House Republican leader Kevin McCarthy said Friday that progress was made “last night” although more still needs to be done. According to the New York Times Republicans and Democrats would not be very far from an agreement, even if the details must still be finalized.
Earlier, executive spokeswoman Karine Jean-Pierre spoke of “productive” negotiations and a “way forward” towards an agreement. President Biden was also optimistic, assuring that there would be “no default” of payment from the United States. Still, the date of June 1, put forward by the US Treasury as a deadline for default, is fast approaching.
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The PCE index in the background
Investors took a back seat to the release of consumer income and spending figures for April, including those from the PCE index, the US Federal Reserve’s (Fed) preferred gauge for measuring inflation. This indicator increased by 4.4% over one year against 4.2% the previous month. The underlying “core PCE” index, which excludes volatile data such as food and energy, accelerated to 4.7% year on year from 4.6% the previous month.
For their part, US household spending rose more than expected, by 0.8% in April, while their incomes also rose (+0.4%).
In addition to accelerating prices, the robustness of US consumption should fuel investor speculation about a possible Fed rate hike in June. Moreover, according to the CME Group’s FedWatch tool, investors are factoring in a probability of more than 60% of a quarter-point increase in these key rates at this next meeting, which will take place on 13 and 14 June.
Casino in the red
On values, Casino fell by 6.4% again after announcing the opening by the Paris Commercial Court of a conciliation procedure to renegotiate its debt as well as the sale of stores in three waves with the Les Mousquetaires group. .
Atos took 4.7%, driven by a favorable court decision in the United States concerning an old dispute between its subsidiary Syntel and a subsidiary of the American group Cognizant.
Faurecia and Valeo gained 7.5% and 4.9% respectively, both benefiting from a buying upgrade from Jefferies, which was previously “underperforming” on both stocks.
On the side of the smallest caps, Inventiva finally ends down (-3.1%) despite the announcement of its Chinese partner which has obtained the necessary authorizations for clinical development in China against “the soda disease”.
Nacon plunged 15.2% while Gollum, the French publisher’s latest game, received a more than mixed reception from the specialist press.
On the other markets, the euro lost 0.2% against the dollar at 1.0704 dollars. Oil prices are on the rise. The contract on Brent from the North Sea for delivery in July goes up 0.9% to 76.96 dollars a barrel while that on WTI listed in New York for the same expiry takes 1.1% to 72.64 dollars per barrel.
Sabrina Sadgui – ©2023 BFM Bourse