After last week's plunge, which saw the Paris index lose almost 6%, the Paris stock market seems to be back on the right foot, gaining 0.91% for the first session of the week, at 7,571 points, with Teleperformance (+3.7%), EssilorLuxottica (+2.6%) and Axa (+1.8%) in support.

Although the indices hesitated a little at the start of the morning, the "cheap buybacks" finally prevailed, while across the Atlantic, Wall Street held firm after 5 consecutive sessions of gains.

Not only are the US indices digesting last week's spectacular gains, but they are also continuing their advance for the 6th consecutive session: the S&P500 and the Nasdaq (+0.2%) are poised to set new all-time closing records, and why not "intraday/closing doubles" by 10pm.

After all, the "4 Witches" session takes place on Friday, and the Nasdaq has gained +17% since the start of the year: the temptation will be strong to ride the uptrend to push Wall Street to the top and end the 1st half on a high note.

The markets' mistrust of a possible rise to power of the RN or the Nouveau Front Populaire was quickly felt on the government bond market.

The spread between the French ten-year OAT yield (3.155%) and the German benchmark rate widened sharply to over 80 basis points on Friday... before falling back by -7.5pts on Monday.
The OAT eased by -1.5pts to 3.155%, but the Bund tightened by +6pts to 2.415%.

The fact that the surge in volatility has not been confined to equities, as illustrated by the euro's collapse on Friday, has prompted some observers to worry about the ongoing stock market correction.

We fear that the yield spread on French bonds, the fall in equities and potentially the fall in the euro will persist at least until July 7", warns Christopher Dembik, investment strategy consultant at Pictet AM.

"Our scenario is based more on increased volatility, with phases of fall followed by rebounds, rather than a continuous fall", he adds.

According to the analyst, everything will depend on the evolution of the polls.

Let's not forget that the political risk is not only French: the coalition in power in Germany is facing major differences over the budget, and a new government is due to be formed in Belgium", he points out.

The open question is how long this phase of correction will last, and whether it marks the beginning of the end of the equity markets' uptrend.

Economic indicators, particularly those relating to inflation, which are likely to influence the trajectory of central banks' monetary policies, should therefore continue to have a major impact this week.
In the meantime, we have just discovered that manufacturing activity fell slightly in June in the New York area, according to the local Fed's 'Empire State' survey.

New orders remained stable, while shipments rose slightly. Labor market conditions remained weak, with employment and hours worked continuing to contract.

The pace of input and selling price increases slowed slightly for the second consecutive month. Although current activity remains weak, optimism about the six-month outlook reached its highest level in over two years.
The only cause for satisfaction: the 'general conditions' index gained ten points, but remained below zero, at -6.0.

T-Bonds deteriorated sharply on Monday, with +8pts to 4.2920%, supporting the Dollar, which resumed its advance with +0.25% to 1.0715/E, while the '$ Index' remained completely stable at 105.55.

In the news for French companies, Casino announces the completion of its share consolidation, through the exchange of one hundred existing shares for one new share, and the completion of its capital reduction, through a reduction in the par value of its shares.

Thales announces that the French SIMu (Service Interarmées des Munitions) has signed an order for several tens of thousands of 120mm ammunition rounds, completing the order for 15,000 rounds signed in 2023.

Thales has also announced a contract with the Brazilian Air Force's DECEA, for the acquisition of Ground Master (GM 200 MM/A) all-in-one multi-mission radars, designed to enhance Brazil's air surveillance capabilities.

Finally, Airbus has announced an order from Belgium for 15 H145M multi-role helicopters for the army, and for two of the same type, with three options, for the federal police.

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