After a gain of more than 3% last week, the Paris Stock Exchange continued its momentum on Monday morning, the stabilization of oil prices raising hopes that inflation is about to peak, which could encourage central banks to be less aggressive. Expectations already fueled by the fear of a recession.
At 9:30 a.m., the Bedroom 40 gained 0.80% to 6,122.13 points in a business volume of 260 million euros.
This last week of the first half will be driven by portfolio readjustments by major institutional investors, which should support the markets. Marko Kolanovic, chief market strategist at JPMorgan, believes that these readjustments should generate a significant increase in stocks, especially as he considers that the market is oversold.
The contracts future on US indices gained a few more points this morning, after a 6.5% gain in the S&P 500 last week, its best performance in a month. Asian markets rose this morning, driven in particular by technology stocks.
Stabilization of inflation expectations
Investors remain focused on macroeconomic indicators and signs of easing price pressures in the US as the inflation expectations component of the consumer confidence index stabilized against all expectations. Jerome Powell told Congress last week that a recession in the US economy remains a ” possibility ”, taking care to specify that the Federal Reserve is “ totally determined to fight inflation.
San Francisco Fed President Mary Daly indicated on Friday that she favored a 75 basis point hike in the Fed funds rate, while her counterpart at the St. Louis office, James Bullard, considered the fears of recession exaggerated.
The automobile offers a rebound
The European Central Bank begins its international forum on Monday in Sintra, Portugal, which brings together the world’s major financiers. Christine Lagarde, Andrew Bailey, her Bank of England counterpart, and Jerome Powell will speak on Wednesday.
Note, moreover, that Russia has defaulted on its foreign currency debt, a first since 1918, after the expiry on Sunday of the deadline linked to the payment of a reimbursement of 100 million dollars. This default is the consequence of Western sanctions which prevent Moscow from making its payments in euros or dollars.
The automotive sector is picking up after four straight weeks of decline. Faurecia rose 6.7% as Jefferies raised its recommendation on the equipment manufacturer from “hold” to “buy”. Valeo follows with a gain of 4.4%, Michelin appreciated by 2.3% and Renault by 4.8%. Plastic Omnium takes 2.2%. The group has reached an agreement for the acquisition of Actia Power, the division dedicated to the electrification of vehicles of the French group Actia, on the basis of an enterprise value of 52.5 million euros.
Valneva rises 4.7%. The pharmaceutical group has indicated that it has received marketing authorization from the European Commission in Europe for its inactivated vaccine against Covid-19. This authorization covers the 27 countries of the EU, as well as Iceland, Lichtenstein and Norway.
Conversely, Ipsen fell 2.3% after announcing the acquisition of the American biopharmaceutical company Epizyme, specialized in oncology, for an initial amount estimated at 247 million dollars (234 million euros).