As unpredictable as ever, the American president put an end to negotiations with the Democrats for a new support plan, before announcing the possible signing of measures in favor of households and airlines. On Wall Street, the announcement is well received, but the rise in American indices has not spread to Paris. The Cac 40 ended down 0.27%.
Four sessions of rise in a row, the time has come for the Paris Bourse to take a break. The Cac ended down 0.27%, to 4,882 points, in a transaction volume of 2.9 billion euros. The Wall Street rebound shortly after the opening (+ 1.6% on the Dow Jones ) did not change the situation, nor did Donald Trump’s tweets . Using his preferred communications channel, White House tenant Twitter , after ending stimulus talks until after the November 3 presidential election, said he would sign a separate bill establishing support checks of $ 1,200 ” for great people IMMEDIATELY “. It also offers $ 25 billion for the airlines that have suffered the most from the Covid-19 crisis.
“Immediately after I win them [the election], we will pass a big supportive law focused on hard-working Americans and small businesses, ” the convalescent president added. On the stock market, these announcements hit the mark. Delta Air Lines rose 2.5%, American Airlines 3.6% and JetBlue Airways 5.9%. European companies are following suit, Air France-KLM , Lufthansa gained 3.23%.
“We’re going to stomp for a while”
” Either way, we’ll end up having a back-up plan, but the point is, we won’t have it right away, so we’re going to stall for a while, ” analyzes Chief Rob Carnell. economist at ING. ” This permanent standoff around the support plan underlines the importance of seeing a party win both chambers of Congress, ” adds Joshua Mahony, market analyst at IG. In addition to the president, American voters will be called on November 3 to renew all elected members of the House of Representatives and a third of the senators.
Will stopping negotiations on a support plan prompt the US Federal Reserve ( Fed ) to adopt additional measures? For Sarah Bianchi of Ever ISI, this situation “increases the likelihood that the Fed will strengthen its quantitative easing ( QE ) program”. The Fed’s monetary policy committee is due to publish the minutes of its last meeting on September 15 and 16 in the evening, at the end of which the institution said it was ready to keep rates low as long as it does not. there will be no recovery in inflation around 2% ” for a while ” and as long as it is not “well anchored ““. These remarks were interpreted by economists as a signal that rates will remain low until 2023, at least.
In addition to monetary policy, it will also be a question of simple policy tonight in the United States . Donald Trump’s Vice President Mike Pence and Democrat Joe Biden’s running mate Kamala Harris will face off in a televised debate from the University of Utah in Salt Lake City. While this type of confrontation does not generally attract crowds, it could generate a little more interest this year after the more than heated debate between Donald Trump and Joe Biden .
Analysts on the move
The analysts’ notes were numerous this Wednesday. They have sometimes pushed down stocks ( Axa , Total , Imerys ) and sometimes increased their share price ( Lagardère , Pernod Ricard ). In detail, Citigroup lowered its price target on Axa from 16.70 to 14.06 euros, Morgan Stanley analysts estimate the potential decline in the securities of the oil majors at 20% – before a rebound in 2021 – and Oddo BHF expects a 36% drop in Imerys profit in the third quarter.
Conversely, Exane BNP Paribas maintains its recommendation to “outperform” on Lagardère , which has already risen by over 80% since September 23, and Jefferies is raising its opinion from “keeping” to “buying” on Pernod Ricard .