The Cac 40 continues to play on US congressional agreement on fiscal stimulus
The Paris Bourse remains supported by the hope of an agreement on a plan of support of the Congress to the American economy. The movement is however hampered by the increase in Covid-19 cases in Europe.
The Paris Stock Exchange is up slightly, investors limiting interventions at the end of a week mainly animated by the soap opera of the fiscal stimulus plan in the United States . Still, the flagship index of the Palais Brongniart is on the way to completing its second weekly increase in a row, a first since mid-August. The recent resurgence of risk appetite is slightly dampened by the record of new Covid-19 contaminations in one day worldwide. According to the World Health Organization (WHO), 338,779 people were infected Thursday, a figure inflated by a surge in Europe with 96,996 new cases, the highest total on the Old Continent ever recorded by the WHO.
“ Overall there is a risk that market sentiment will easily turn sour in the near term given the uncertainty surrounding the US election, Brexit , increasing Covid-19 cases and the risks of strengthening health constraints , ”said UniCredit analysts in a note cited by Reuters.
At 12:30 pm, the Cac 40 gained 0.39% to 4,931.13 points in an apathetic business volume of 750 million euros. The December futures contract on the Dow Jones index is up 125 points (+ 0.44%).
Towards a “blue wave” on November 3?
The latest episode in the American budget series, the White House is changing its tune, Donald Trump once again appearing to lean towards a broader support plan. Treasury Secretary Steven Mnuchin has indeed announced to Nancy Pelosi, the Democratic President of the House of Representatives, that the President wants a comprehensive aid plan, after having dismissed it last Tuesday for measures focused on airlines, small businesses and direct assistance to households.
Investors also believe that a clear victory for Joe Biden in the November 3 presidential election and a strengthening of Democrats in Congress would be pro-equities by increasing the likelihood of an ambitious fiscal stimulus package, which has effect of alleviating fears about tax increases. We’re facing a ” growing likelihood of seeing, let’s call it a blue wave [color of the Democratic Party],” said Abby Joseph Cohen, senior investment strategist at Goldman Sachs on Bloomberg TV. Thismight not be such a bad thing, because it would give us more certainty about politics, especially about using fiscal policy to support our economy at this time ”.
Analysts are taking action again
Strongest rise in SRD, Eramet jumped more than 11% in favor of a note from Oddo BHF , passed from “neutral” to “buy” on the title of the mining group. The broker made the same increase on Seb (+ 1.8%).
Among other analyst ratings, Credit Suisse went from “neutral” to “outperformance” on asset manager Amundi (+ 2.3%).
Euronext fell 4.5% in the face of a fait accompli. The pan-European platform will buy Borsa Italiana, the operator of the Milan Stock Exchange, from the London Stock Exchange (LSE) for 4.325 billion euros, the two groups announced this morning.
Carrefour gained 2.1% in the wake of the Stoxx 600 in distribution, boosted by sales exceeding expectations and optimistic forecasts from Danish Pandora and German Zalando.
Nokia gains 2.4%. Orange Belgium has chosen the Finnish telecom supplier to gradually renew its existing mobile network and for the deployment of 5G. Orange appreciates by 1.4%.