The Paris Stock Exchange unchanged after the legislative elections

The Paris Stock Exchange unchanged after the legislative elections

The Paris Stock Exchange was rather close to equilibrium on Monday morning, investors ignoring the result of the French legislative elections and maintaining their cautious position amid the risk of recession in the United States.

The star CAC 40 index has been hovering around equilibrium since the opening and took 0.29% to 5,899.63 points at 10 a.m. On Friday, it had fallen to its lowest closing level since March 2021 and posted a loss of 4.92% for the week, the worst since the Russian invasion of Ukraine.

“Market conditions remain very difficult in a context of high inflation, aggressive monetary tightening by central banks and an economic slowdown which increases the risk of recession”, noted Xavier Chapard, of La Banque Postale AM.

It was in particular the 0.75 percentage point increase in the key rates of the American Federal Reserve (Fed) that shook up the markets.

For Oanda analyst Jeffrey Halley, the “list of recessionary factors” is long: “rising inflation and interest rates in developed countries, the war between Ukraine and Russia and disruptions resulting from this for raw materials, the slowdown in China”.

Across the Atlantic, the statements of economists and members of American political authorities anticipating at best a slowdown in the economy, at worst a recession next year, are accumulating.

For Mr. Hewson, “the risk now is that the Fed will have to be even more aggressive in its next meetings” to bring inflation under control.

One of the Fed governors has also said that he is in favor of a further increase in key rates by three quarters of a percentage point in July, and the president of the Cleveland Fed, Loretta Mester, has estimated that he “will take two years” to bring inflation down to 2%.

In France, the legislative elections ended with the loss of an absolute majority for President Emmanuel Macron in the National Assembly. The Macronist candidates Together win 245 seats, ahead of the left-wing coalition Nupes and its allies (137 seats) and the RN which achieves a historic breakthrough (89 seats).

An isolated Macron camp without a coalition guaranteeing him an absolute majority is a “slightly negative scenario for French assets, as it would limit France’s ability to push through reforms and clean up its public finances, and would maintain high political uncertainty”. , said Xavier Chapard. “But this scenario is not very negative, because the government would remain centrist and very pro-European,” he added.

In the debt market, there were no signs of post-election stress.

The New York Stock Exchange will also be closed on Monday, a public holiday in the United States.

Pfizer stake in Valneva

The American laboratory Pfizer will acquire 8.1% of the capital of the Franco-Austrian biotech Valneva, for an amount of 90.5 million euros, through a capital increase. Valneva shares jumped 13.43% to 8.99 euros.

Euronext CAC40

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