Markets in Paris and other European markets continued to grow on Monday, with the wave of cheap shopping currently outweighing fears of a recession. Investors are questioning the possible impact of the economic downturn on central banks’ monetary policy, which may be less aggressive. The supporting factor is the growth of stocks associated with raw materials.
In the morning Bedroom 40 increased by 0.48% to 6102.45 points after a peak of 6156.60 (+ 1.37%) with a business volume of 600 million euros.
And what about profit forecasts?
According to strategists Morgan Stanley, European stocks have not yet appreciated prices at risk of recession, despite the low level of evaluation. ” Stock markets typically recede two to three weeks before earnings forecasts begin to be revised downward, but the latter have not yet begun to slide into negative territory. “, They emphasize. They expect the decline in revenue targets to begin in the third quarter.
This last week of the first half of the year should also be triggered by portfolio adjustments by key institutional investors who need to support the markets. Marko Kolanovic, JPMorgan’s chief market strategist, believes that these adjustments should lead to a significant increase in shares, especially since he considers the market oversold.
Inflation remains on the menu of the week
Investors remain focused on macroeconomic indicators and signs of easing price pressures in the United States, 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 “, Noting that the Federal Reserve is fully defined to fight inflation.
San Francisco Fed President Mary Daly said on Friday that she was in favor of raising the Fed rate by 75 basis points, while her colleague from the St. Louis office, James Bullard, considered fears of a recession exaggerated.
Inflation will once again be at the center of inflation this week with U.S. household income and expenditure statistics on Thursday, including the PCE component of personal consumption expenditures, the Fed’s most focused measure of inflation. In the Old Continent, consumer price indicators in the eurozone will be released on Friday.
But before that this afternoon, the market will follow the evolution of orders for durable goods in the United States in May, as well as promises to sell housing for the same month.
The car is in the spotlight
In addition, it should be noted that for the first time since 1918, Russia has overdue its foreign currency debt after the expiration of the term on Sunday related to the payment of compensation of $ 100 million. This default is a consequence of Western sanctions, which do not allow Moscow to make payments in euros or dollars.
The automotive sector is gaining momentum after four consecutive weeks of decline. Fauretia rose 6.1% as Jefferies raised its equipment manufacturer’s recommendation from “hold” to “buy.” Valeo further with an increase of 4.8% Michelin rose by 2.1% and Renault at 5.2%. Plastic omnium occupies 3.8%. The group has reached an agreement to acquire Actia Power, a vehicle electrification division of the French group Actia, at a cost of € 52.5 million.
Valneva increases by 4.5%. The pharmaceutical group said it had received marketing authorization from the European Commission in Europe for its inactivated Covid-19 vaccine. This permit applies to 27 EU countries, as well as Iceland, Liechtenstein and Norway.
And vice versa, Ipsen fell 4.3% after the announcement of the acquisition of the American biopharmaceutical company Epizyme, which specializes in oncology, for an initial amount estimated at 247 million dollars (234 million euros).