Stock market: CAC 40 boosted by hopes of ECB and Fed rate cuts

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The Paris Stock Exchange (CAC 40) opened higher again on Thursday, June 6, 2024, with the European Central Bank expected to announce a cut in its key rates. The Fed is also expected to cut its rates by the end of the year.

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– Paris Stock Exchange.

PUSH Paris Stock Exchange rose 0.37% on Thursday morning, calm ahead of the general meeting European central bank (BCE), which should lead to the announcement of a lowering its key rates. The flagship index CAC 40 advanced by 30.05 points to 8,036.62 points around 9:35. On Wednesday, the index strengthened 0.87%supported by US employment indicators, which stock markets see as positive. “Sentiment in international financial markets is currently increasing and is influenced by hopes of lower interest rates in Europe and the United States”according to independent analyst Andreas Lipkow.

In New York, the Nasdaq (+1.96% on Wednesday) and the S&P 500 (+1.18%) hit new closing records, and the market capitalization of semiconductor giant Nvidia surpassed Apple. The latest indicators on the US labor market showed a slowdown in job creation and a decrease in vacancies. This evidence of easing labor market tensions boosted expectations and US Federal Reserve rate cut (Fed) until the end of the year and lowered interest rates on US government bonds in the bond market.

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ECB: Inflation rising but ‘strong case for rate cuts’

Christine Lagarde’s press conference at the ECB

On the US monetary policy front, investors now await official employment data on Friday, ahead of next week’s Fed meeting. But before that, the markets will mainly be animated by the ECB President’s press conference on Thursday, Christine Lagarde. The ECB rate cut of 0.25 percentage points is more than widely expected “Therefore, the big question will be what the signals from the ECB will be for the future and how quickly future rate cuts could happen”Deutsche Bank analysts estimate.

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“It is very likely that President Christine Lagarde will repeat on several occasions that the monetary institution is… +data dependent+ (meaning that the next economic statistics will determine the ECB’s next moves)”, adds John Plassard, investment specialist at Mirabaud. In the bond market, the interest rate on the ten-year French government bond was stable at 2.99%.

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Atos: two bids under study, ‘massive shareholder dilution inevitable’

Atos is pending

The heavily indebted IT group announced on Thursday that it was extending the deadline “until the beginning of the week of June 10” to select a counter offer “privileged”between the Czech entrepreneur Daniel Křetínský and the second consortium led by Onepoint, its main shareholder. Its stock increased by 9.13% to 1.19 euros around 9:30 a.m., but shows a decline of more than 28% during the week.

Rémy Cointreau is banking on a recovery

The spirits group Rémy Cointreau (+5.16% to 87.70 euros), hit hard by the decline in sales of its cognacs, recorded year-on-year decrease in net profit by 3.7% but is counting on a “gradual recovery” of its operations in the coming months.

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Europapi smiles again

French active pharmaceutical ingredient producer Euroapi announced on Thursday that it has received official notification from the European Commission that it is one of 13 selected companies to share public funding of up to €1 billion. Its share climbed by 8.56% to 4.06 euros. In March, Euroapi announced a new quality issue at one of its manufacturing plants, forcing it to suspend its 2024 financial targets.

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