The control room of Euronext, the company that manages the Paris Stock Exchange (AFP / ERIC PIERMONT)
The Paris Stock Exchange cautiously digests on Tuesday the myriad of presidential decrees signed in the United States by Donald Trump the day before, in the wake of his inauguration.
Around 10:00 a.m., the CAC 40 gained 0.09% to 7,740.34 points, up 6.84 points.
“Donald Trump made a resounding return to power last night (…), and presented plans for the immediate implementation of orders and actions intended to radically change the course of the country,” commented John Plassard , head of investment for Mirabaud.
But “the pace of presidential decrees (from Trump) will remain high even today. Few investors therefore really dare to come out of their reserves,” explained Jochen Stanzl of CMC Markets.
The new American president signed a raft of presidential decrees on Monday as soon as he was inaugurated, including the withdrawal of the United States from the WHO and the Paris climate agreement, the establishment of a state of emergency at the border with Mexico against immigration, and the pardon of 1,500 attackers of the Capitol.
He also said Monday that he planned to impose customs duties of 25% on products from Canada and Mexico starting February 1.
The euro zone – which exports more products to the United States than it imports – is also in the new president's sights.
-Europeans “are tough, very tough. They don't buy our cars, nor our agricultural products, they buy almost nothing,” Trump said Monday evening at the White House. “So we are going to solve this problem by imposing customs duties or by forcing Europeans to buy our oil (…) and our gas.”
Despite these headwinds, “in the short term, the Paris Stock Exchange should benefit from the enthusiasm linked to the return of Donald Trump. Investors have remembered that his first presidency was marked by strong volatility in financial assets, but above all by an increase” in stock market indices, noted Christopher Dembik, investment strategy advisor at Pictet AM.
The markets especially favor the tax cuts and deregulations promised by Mr. Trump, capable, according to them, of stimulating growth.
The markets will also watch on Tuesday the publication at 10:00 GMT of the ZEW indicator measuring investor confidence in January in Germany, the largest economy in the euro zone.
On the bond side, the French ten-year borrowing rate reached around 10:00 a.m. 3.29%, compared to 3.30% the day before at the close. Its German equivalent, a benchmark in Europe, stood at 2.51%.
Euronext CAC40
