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The Cac 40 holds up despite Trump’s about-face on a support plan

The Paris Bourse gives up a few points despite Donald Trump’s freezing of discussions in Congress on a support plan. The president would consider separate measures aimed at workers, small businesses and airlines.

The Paris Bourse shows a limited pullback, as US index futures rise after Donald Trump’s decision to freeze talks on a congressional support plan until after the election. The market nevertheless takes note of the fact that the American president is considering certain aid after the elections on condition that they are decoupled from a larger plan and voted separately.

”  This permanent showdown around the support plan underlines the importance of seeing a party win both houses of Congress,  ” recalls 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.

At 2.45 p.m. , the Cac 40 lost 0.19% to 4.8865.36 points in a business volume of 1 billion euros. The December futures contract on the Dow Jones index is up 225 points (+ 0.81%).

In a message posted on Tweeter, the American president indicates to have ”  instructed my representatives to stop negotiating until the election is over, and that immediately after I win them, we will adopt a grand Support law focused on hardworking Americans and small businesses  ”. He then spoke out, still on Twitter , in favor of a separate bill establishing support checks of $ 1,200 ”  for great people NOW  “. It also offers $ 25 billion for the airlines that have suffered the most from the health crisis. Donald Trump also called on Congress to vote for these measures. In New York, Delta Air Linesup 3.6% on the pre-market, American Airlines 4% and JetBlue Airways 6%.

“  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,  ” said Rob Carnell, chief. economist at ING.

The risk of doing too much is limited

Jerome Powell insisted on Tuesday on the need for a congressional support plan to support the resumption of activity. ”  The risk of doing too much for now seems to be limited,  ” he told the National Association of Business Economics. ”  Even if the monetary decisions turn out to be more important than necessary, they will not be lost,  ” he added. Some strategists therefore believe that stopping negotiations on a congressional support plan could prompt the Fed to take additional measures. For Sarah Bianchi of Ever ISI, this situation “increases the likelihood that the Fed will strengthen its quantitative easing ( QE ) program”.

The monetary policy committee of the American central bank must publish at 8 pm the “minutes” of its meeting of September 15 and 16. If the Federal Reserve has been clear on its intention to extend its low interest rate policy for several years, “  its comments about asset purchases were deemed more ambiguous,  ” Oddo BHF analysts wrote earlier this week.

Finally, Mike Pence , vice-president of Donald Trump, and Kamala Harris, running mate of Democrat Joe Biden , will be opposed in the evening as part of the televised debate of the vice-presidents from the University of Utah in Salt Lake City. . While this type of confrontation does not usually attract crowds, the chaotic nature of the debate between Donald Trump and Joe Biden gives it a significance not previously known. Mike Pence has a reputation as a good supporter of Donald Trump’s politics, while Kamala Harris is considered a good speaker.

Analysts on the move

Axa fell 1.6%. Citigroup has lowered its target price on the title of the insurer from 16.70 to 14.06 euros.

Total lost 1.2% the day after a gain of more than 2%. Morgan Stanley analysts estimate in a sector note that the bearish scenario remains relevant for the oil majors who could still lose 20% of their value.

Conversely, Lagardère continued to grow with a gain of 4.6%. Exane BNP Paribas maintains its recommendation of “outperformance” on the stock, which has posted a gain of over 80% since September 23.

Largest rise in the Cac 40, Pernod Ricard won 2.2% while Jefferies raised its recommendation to “keep” to “buy” on the title of the spirits group.

Lastly, Imerys , which specializes in minerals for industry, is the red light of the SRD with a decline of 6.4%. Oddo BHF anticipates a 36% drop in the group’s profit in the third quarter due to the weakness of its end markets in steel, automotive and paper.

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