Political and economic uncertainty should weigh on the Cac 40 on Monday


The Paris Stock Exchange is expected to continue its decline this morning, with political risk in France after the legislative elections adding to recession fears. Mainly technical due to the “four witches”, the surge on Wall Street on Friday should hardly support the market, especially since the American market is closed on Monday for the first celebration of Juneteenth, commemorating the abolition of slavery, at the federal level.

Emmanuel Macron’s supporters only obtained a relative majority in the National Assembly. Together, which includes Renaissance, Modem and Horizon, only won 245 seats in the second round of legislative elections on Sunday, against the 289 required to secure an absolute majority out of a total of 577 deputies.

Jerome Powell facing Congress

The coalition formed by the New Popular Ecologist and Solidarity Union (Nupes), which brings together the Insoumis, the Socialist Party, the Communist Party and the EELV ecologists, won 135 seats, thus becoming the leading opposition force, but the real surprise comes from the 89 seats obtained by the National Rally, its best score in a legislative election since 1988, without the help of proportional representation.

Emmanuel Macron will therefore have to deal with a fragmented National Assembly to pass his bills, with the need to negotiate dearly and on a case-by-case basis with his supporters to avoid political paralysis.

The specter of sustained inflation will also be on everyone’s mind this week with Jerome Powell’s semi-annual hearing on monetary policy before both houses of Congress on Wednesday and Thursday. 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. 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 that it will take several years to reach the 2% inflation target.

Pfizer takes a stake in Valneva

Valneva 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.

Airbus. Air India plans to order up to 300 single-aisle jets, Bloomberg reports, citing people familiar with the matter. The Indian company could order aircraft from the Airbus A320 neo family or Boeing 737 Max, or choose to place an order mixing these two families, adds the agency.

Atos announced that its financial director Stéphane Lhopiteau will leave the group in the second half of the year and that he will be replaced in this position by his deputy Nathalie Sénéchault, who will be responsible for supporting the group’s transformation plan.

Among analysts’ notes, Jefferies raised its recommendation on Renault from “hold” to “buy” and raised its target price from 22 to 40 euros.




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