The Paris stock market is following a somewhat opposite scenario to that seen on Tuesday: initially down at 7,490 (the low tested the day before, but also the day after the 1st round of legislative elections), the CAC40 rallied, turned back into the green, gained +0.8% at lunchtime and then stabilized at 7,560 (or +0.7%).560 (+0.7%).
The prospect of lengthy negotiations to form a new government should continue to generate volatility, and the lack of visibility could hold back the index.

In terms of support and downside, the 7,500/7275 point level remains a key support until proven otherwise", assures Jérémy Delsol, independent trader and investor.

"On the other hand, I'm not forgetting the 6950/6775 point level, in the event of fears and desertion on the part of some investors, particularly if the political crisis persists too long and possibly leads to a recession", adds the professional.

French stocks are benefiting from a clear easing in yields (-8.5pts for our OATs, the trajectory is the opposite of the previous day's), while the spread with the Bund is contracting by -2.5pts (erasing Tuesday's +2.5pt widening).
The Euro-Stoxx50 is also benefiting from the improvement in bond prices, with a gain of +0.7 to +0.8%.
Wall Street opens with a new flurry of absolute records (7th in a row): 27th for the Nasdaq at 18,515, 37th for the S&P at 5,592.

While French political news still dominates, economic fundamentals have not totally disappeared from investors' radar screens.

In the absence of any leading indicators, market participants are likely to focus their attention once again on Fed Chairman Jerome Powell's second hearing before the House of Representatives, scheduled for this afternoon.

Yesterday, in front of the Senate, the Federal Reserve boss had paved the way for a rate cut next September by welcoming the decline in inflation and the easing of tensions on the labor market.

Christopher Dembik, of Pictet AM, points out that "he highlighted the risk of cutting rates too late or too little, which could have negative effects on economic activity and employment".
"Everything is in place for a rate cut in September", concludes the strategist.

The FOREX remains calm, with the Euro clawing back 0.1% to 1.0825 (everything seems to have stood still since last Friday), while Gold is holding on to yesterday's gains at $2,380/Oz...

In French company news, BNP Paribas has announced the signature of a multi-year partnership with Mistral AI, which will give it access to all the start-up's current and future business models in the banking sector.

Vallourec announces that it has been awarded a contract by TotalEnergies to supply nearly 5,000 tonnes of OCTG tubes and associated services, for the Kaminho deepwater project off the coast of Angola.

Copyright (c) 2024 All rights reserved.