When politics enters the menu of market problems, Market News

EarthquakeHit “,” France exploded “,” Experience unruly France “… The French press, the day after the failure of the head of state to obtain an absolute majority in the National Assembly, is unanimous: Emmanuel Macron spent his worst Sunday evening at the Elysee Palace since he came to power, and the next five years will be tumultuous.

Meeting in an unknown country

If the leader of rebellious France, Jean-Luc Mélenchon, does not become prime minister, there will still be an era of great uncertainty about the ability of the president and his preparation to carry out his program in good conditions, those who under the banner of “Together!” garnered 245 seats, far from an absolute majority which requires 289. It is followed by Nupes (leftist coalition) with 131 elected. The RN makes a historic breakthrough, having received 89 deputies. Having suffered a defeat in the presidential elections, the LR party with 61 seats could play an important role influencing the decision-making in the Assembly. ” This means that there will probably be fewer structural reforms, but we already have less weight in European shares, and this does not significantly change our position. Willem Sels, Global Head of Investments, Asset Management and Private Banking at HSBC, says.

In the stock market, this failure of the President’s party is superimposed on many already existing sources of uncertainty, such as the war in Ukraine, inflation, monetary tightening, and the prospect of a recession. One by one, many major central banks (BoE, ECB, SNB, Fed, etc.) raised their key rates to fight inflation. Will their actions be enough? Probably no. This weekend, Fed chief Christopher Waller advocated a quick hike in key rates, possibly another 75 basis points in July to catch up after constriction and while inflation peaks at 8.6% within one year. Not everyone shares this opinion. Esther George, the only one who disagreed with the latest monetary policy advice, called for moderation, recalling that a sharp and unexpected increase in interest rates federal funds can destabilize businesses and households.

Jerome Powell’s biennial audition

In this context, the intervention of Fed Chairman Jerome Powell will be closely monitored. He will speak at his biennial hearings before members of Congress (first in the Senate, then in the House of Representatives) on Wednesday and Thursday. In the eurozone, his colleague Christine Lagarde on Monday confirmed the ECB’s desire to raise interest rates twice during the summer and prevent fragmentation of the debt market between countries in the region.

Faced with these various sources of concern, investors refrained from truly hunting for bargains after the index fell 4.92%. Bedroom 40 last week. The Paris index rose slightly by 0.64% to 5920.09 points, which allowed it to exit the “bear market” (bear market, a synonym for falling more than 20% from the last high on January 5). ). The volume of business is only 2.83 billion euros due to the absence of American investors this June holiday dedicated to the liberation of African American slaves.

Pfizer buys stake in Valneva

Action on the value front Valneva rose 29.31%, well ahead of SRD. American laboratory pfizer (-2%) will acquire 8.1% of the capital of the Franco-Austrian biotechnology company for 90.5 million euros through an increase in the reserved capital, which is due to take effect on Wednesday. This visit to the roundtable is intended to strengthen the strategic partnership forged between the two companies on Lyme disease, a disease caused by a tick infected with a bacterium of the genus Borrelia.

Also surrounded by Renault rose by 9.74%. Jefferies upgraded the automaker’s recommendation from Hold to Buy and raised its price target from €22 to €40. Following in his footsteps Valeo as well as fauresia increased by 8% and 7.72% respectively.

Air France-KLM rose by 7.87%. The International Aviation Association (IATA) predicts a return to profits for companies in the sector next year thanks to improved travel demand.

Vice versa, Saint-Gobain fell 3.99% due to a nearly 12% drop in Kingspan shares across the English Channel. The Irish insulation specialist announced that its markets have deteriorated over the past two months as order volumes have fallen significantly.