The Paris Stock Exchange is stabilizing after suffering its biggest weekly drop since early March, while underperforming other European markets. With 245 deputies, Renaissance, the coalition formed around Emmanuel Macron, certainly remains in the majority in the National Assembly after the legislative elections on Sunday, but it misses the absolute majority of 289 deputies by 44 elected representatives.
With 131 seats, the Nupes, which brings together the rebellious, the Communist Party, the Socialist Party and the ecologists of EELV, becomes the first opposition party. LR obtained 61 deputies and the National Rally 89.
Around 2:30 p.m., the Bedroom 40 gained 0.21% to 5,895.17 points. The low volumes, with barely 980 million euros traded on Cac 40 stocks, also reinforce volatility due to the closure of Wall Street on Monday for the celebration of Juneteenth, commemorating the abolition of slavery. . Elsewhere in Europe, the Dax of the Frankfurt Stock Exchange takes 0.48% and the FTSE Eb Milanese 0.76%.
The results of the legislative elections compromise Emmanuel Macron’s reform projects in the face of a split Parliament. ” This means that there will probably be less structural reform, but we are already underweight European equities, and this does not change our position significantly. says Willem Sels of HSBC. This failure nevertheless comes on top of fears of recession fueled by soaring inflation and the tightening of monetary policies by central banks.
Jerome Powell will hammer his message to Congress
The specter of long-lasting inflation is on everyone’s mind as producer price inflation hit 33.6% year on year in Germany last month, a new record high. The European Central Bank announced last week that it was working on a tool that would help avoid fragmentation that would weaken the most indebted countries in the euro zone as the European Central Bank announced the end of its purchases of assets and that it will raise its key interest rates by 25 basis points next month.
In the United States, Jerome Powell will be heard on Wednesday and Thursday by both chambers of Congress as part of his semi-annual monetary policy speech. He should on this occasion repeat that the Federal Reserve will do everything to fight inflation, which reached a record 8.6% over one year in May. The Federal Reserve raised the fund funds rate by 75 basis points last Thursday, the sharpest tightening since 1994.
Fed Governor Christopher Waller said he will support a 75 basis point hike in the Fed funds rate in July if the next economic indicators turn out to be in line with his expectations. Cleveland Fed President Loretta Mester believes that the risk of recession is increasing and warns that it will take several years to reach the 2% inflation target.
Valneva boosted by Pfizer, Saint-Gobain falls
Valneva jumped nearly 29%. The pharmaceutical group has announced that Pfizer will acquire 8.1% of its capital for 90.5 million euros. The investment will be made at a price of 9.49 euros per share, by the ” through a reserved capital increase intended to strengthen the strategic partnership concluded between the two companies on Lyme disease the company said in a statement.
Biggest drop in the Cac 40, Saint Gobain loose 4.4% in the wake of the fall nearly 12% of the Irish Kingspan in London. The insulation materials specialist announced that its markets have deteriorated over the past two months with a significant deterioration in order volumes compared to the same period last year.
Conversely, Renault increased by 7%. Jefferies raised its recommendation on the automaker from “hold” to “buy” and raised its price target from 22 to 40 euros. In its wake, Valeo and Faurecia rose by 5.2% and 4.2% respectively.
Air France-KLM appreciated by 4.4%. The International Aviation Association (Iata) forecasts a return to profits for companies in the sector next year thanks to an improvement in travel demand.