Post-election rally gives way to CAC 40 consolidation, spotlight on eurozone inflation and ECB annual forum

Post-election rally gives way to CAC 40 consolidation, spotlight on eurozone inflation and ECB annual forum
Post-election rally gives way to CAC 40 consolidation, spotlight on eurozone inflation and ECB annual forum

The surge of the Paris Stock Exchange in reaction to the results of the first round of the legislative elections should already stop, according to the Cac 40 futures, down about forty points this Tuesday half an hour before the opening. The index gained a little more than 1% yesterday, with a peak at 2.8% during the session, the victory of the National Rally and its allies with 33.14% of the votes is certainly a record for the extreme right but investors feared an even bigger tidal wave.

It is by no means certain that the National Front party will manage to secure an absolute majority in the second round on Sunday. With the withdrawals of candidates from the presidential coalition and the New Popular Front who came in third place (they have until 6 p.m. to make themselves known), some constituencies could escape Marine Le Pen’s troops, which is somewhat reassuring on the markets. The least worst scenario would be a Parliament without a majority, political inertia synonymous with less explosive spending but also with a lack of progress in cleaning up France’s budgetary situation, which is already quite fragile. There has been some opportunistic buying, but market activity is mainly driven by short buybacks and index management, argues Thomas Helaine, at TP ICAP. Interest in selling remains predominant, about three times higher than interest in buying ».

Jerome Powell arrives in Sintra

The economic calendar is getting bigger with the Eurozone consumer price figures at 11:00. These are preliminary data for June and the index is expected to fall by 0.1 points to 2.5% year-on-year and 2.8% in underlying terms. On the monetary front, the European Central Bank (ECB) Forum continues in Sintra, Portugal. Jerome Powell, the Chairman of the Federal Reserve, will join his ECB counterpart for a debate at 14:30. Christine Lagarde repeated yesterday in her opening speech that there is not yet sufficient evidence that the threat of inflation has passed, reinforcing the prospect of a status quo at the meeting on July 18.

Across the Atlantic, attention will be focused on the Jolts report on job openings for May, released at 4 p.m. The indicator, closely scrutinized by the Fed, is expected to contract again. The Bloomberg consensus is for 7.95 million job openings, compared to 8.06 million the previous month.

Teleperformance: AI threat overestimated, according to analysts

The collective catering group Sodexo achieved a turnover of 6.07 billion euros over the period from March to May, up 6.8% at constant scope and exchange rates, which is in line with its expectations but slightly lower than analysts’ forecasts.

Carrefour has completed the acquisition of the Cora and Match brands in France based on an enterprise value of €1.05 billion. At the same time, the French group is raising its annualized synergies target from €110 million to €130 million by 2027, thanks to the optimization of the brands’ commercial performance and costs.

On the analyst side, Morgan Stanley revised its advice on Teleperformance from “inline weighting” to “overweight”, arguing that fears about the disruptive threat posed by artificial intelligence for the call center specialist ” exceeds reality “. Stifel begins monitoring Engie with a buy rating and a target price of 18.20 euros.

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