Cac 40 continues to grow, car gains color, market news

The Parisian and other European markets continued to rise on Monday, the wave of cheap purchases at the moment has prevailed over the fears of a recession. Investors are wondering about the possible impact of the economic downturn on the monetary policy of central banks, which could be less aggressive. Supporting factor is the growth of stocks associated with raw materials.

Mid morning Bedroom 40 added 0.48% to 6,102.45 points after a peak of 6,156.60 (+1.37%) on a business volume of 600 million euros.

What about income projections?

According to strategists at Morgan Stanley, European equities have not yet priced in recession risk despite low valuation levels. ” Equity markets typically retreat two to three weeks before earnings forecasts begin to be revised down, but earnings have not yet begun to slide into negative territory. “, – they stress. They expect that the decline in the forecast for earnings will begin in the third quarter.

This last week of the first half should also be driven by a portfolio adjustment by large institutional investors, which should support the markets. Marko Kolanovic, chief market strategist at JPMorgan, said these adjustments should lead to a significant increase in inventories, especially as the market is oversold.

Inflation stays on the menu for the week

Investors remain focused on macroeconomic indicators and signs of easing in US price pressures as the inflation expectations component of the consumer confidence index has stabilized against all expectations. Last week, Jerome Powell told Congress that the recession in the US economy remains ” possibility “, taking care to indicate that the Federal Reserve ” completely resolute to fight inflation.

San Francisco Fed President Mary Daly said on Friday she favors a 75 basis point hike in the Fed’s funds rate, while her St. Louis office colleague James Bullard said recession fears are exaggerated.

Inflation will be back in the spotlight this week following the release of US household income and spending statistics on Thursday, including the PCE component of personal consumption spending, the Fed’s most closely monitored measure of inflation. On the Old Continent, data on consumer prices in the euro area will be made public on Friday.

But before that this afternoon, the market will be keeping an eye on the performance of US durable goods orders in May, as well as home sales forecasts in the same month.

Car in the spotlight

Also, note that Russia defaulted on its foreign-currency debt for the first time since 1918, after the $100 million settlement deadline expired on Sunday. This default is a consequence of Western sanctions that prevent Moscow from making payments in euros or dollars.

The automotive sector is gaining momentum after four consecutive weeks of decline. fauresia rose 6.1% as Jefferies upgraded its OEM rating from Hold to Buy. Valeo follows with an increase of 4.8%, Michelin went up by 2.1% and Renault by 5.2%. plastic omnium occupies 3.8%. The Group has reached an agreement to acquire Actia Power, the vehicle electrification division of the French Actia Group, based on an enterprise value of EUR 52.5 million.

Valneva rises by 4.5%. The pharmaceutical group said it has received permission from the European Commission to market its inactivated Covid-19 vaccine in Europe. This permit applies to the 27 EU countries as well as Iceland, Liechtenstein and Norway.

Vice versa, Ipsen fell 4.3% after announcing the acquisition of US oncology biopharmaceutical company Epizyme for an initial $247 million (€234 million).