The control room of Euronext, the company that manages the Paris Stock Exchange (AFP/Archives/ERIC PIERMONT)
The Paris Stock Exchange rebounded by 0.97% on Wednesday, welcoming the slowdown in inflation in the United States and its positive implications for the evolution of interest rates.
The flagship CAC 40 index rose to 7,864.70 points. He had lost a total of 2.66% in two sessions, weighed down by political uncertainties linked to the organization of early legislative elections in France after the victory of the far-right National Rally party in the European elections.
Main event of the session, the publication of the CPI inflation index in the United States reassured investors.
The CPI index stood at 3.3% year-on-year in May compared to 3.4% in April. This is better than what was expected by analysts, who expected 3.4% over one year, according to the Market Watch consensus.
Excluding volatile food and energy data, so-called core inflation is also evolving more favorably than expected, at 0.2% over one month compared to 0.3% in April, and 3.4 % compared to 3.7% over one year.
Analysts expected 0.3% and 3.5% respectively.
These figures “probably mean that the trend is towards disinflation”, underlines Florian Allain, portfolio manager at Mandarine Gestion, who recalls that “it is underlying inflation which determines what the Federal Reserve will do”.
After this publication, sovereign interest rates on the bond market eased significantly, a sign that investors are banking on a reduction in key rates from the American central bank this year.
The scenario of a first rate cut in “September” seems “to be confirmed”, before a “second minimum rate cut” during this year, thinks Florian Allain.
The monetary policy committee of the American Federal Reserve (Fed) is meeting on Wednesday, and will announce the decision of its members at 8:00 p.m. (6:00 p.m. GMT).
No rate changes are expected at this stage, but investors will be watching for indications from Fed officials regarding the number of rate cuts each of them is planning for 2024.
In France, political uncertainty continues to occupy the minds of investors.
On the equities side, they are still uncertain regarding “domestic and/or state-dependent values”, according to Florian Allain.
Orange (-2.67% to 9.54 euros), Bouygues (-2.44% to 31.97 euros) and Engie (-1.72% to 14 euros) for example did not benefit from the stock market rebound of day and posted the worst falls in the CAC 40 index.
For Mr. Allain, it will be “complicated” to attract “foreign investors” in this context of uncertainties.
© 2024 AFP
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