(News Bulletin 247) – The Paris Stock Exchange ends up slightly ahead of the US Federal Reserve’s monetary policy decision. The CAC 40 gleans 0.3% the day after a heavy decline of 1.45%.

Before major events, the Paris Stock Exchange tends to show feverishness. And today’s session is no exception as the Federal Reserve will make its monetary policy decision on Wednesday evening, before that of the European Central Bank on Thursday.

The CAC 40 closed slightly up 0.28%, supported by luxury stocks the day after a sharp decline of 1.45%. Despite the ambient heaviness on the markets, the Paris star index even managed to maintain the 7,400 points to finish its race at 7,403.83 points.

The operators found a little comfort with the most sparkling values ​​​​of the rating – Kering, Hermès or LVMH gained between 0.8% and 2.1% -, before taking note of the future orientation of the monetary policy of the Fed. Investors expect another 0.25 percentage point tightening to contain inflation.

A little earlier in the afternoon the operators learned of job creation up sharply in the private sector, with 296,000 new jobs created in April against 142,000 in March. For its part, service activity continues to expand, with an ISM index rising to 51.9 points in April.

Stop or again?

The challenge is therefore to know whether the Fed will then take a long break. “The Federal Reserve should proceed with a final increase in its rate of 25 basis points before a period of stability for several months”, anticipates Emmanuel Auboyneau, Managing Partner of Amplegest. “Today has always been likely to mark the end of the US central bank’s tightening cycle – although it hasn’t explicitly signaled it – but we have now reached a point where every hike in rate could have unwanted and unintended consequences,” said Craig Erlam of Oanda.

Especially since Wall Street remains worried about the fragility of regional banks, which again unscrewed on Tuesday, investors wondering which bank will sink or be pushed into the arms of a larger establishment, after Silicon Valley Bank, Signature Bank and First Republic.

Air France-KLM on the tarmac

As for French banks, BNP Paribas lost 1.2% despite the publication of accounts slightly above expectations for the first quarter.

Stellantis lost 1.8% after publishing slightly higher sales than analysts expected, which was not enough to allay market fears about future price trends in the coming months. Investors are also taking the opportunity to sell Renault shares, which lost 1.9%.

Air France-KLM, for its part, returned 2.5%, penalized by a negative cross-reading of the results of Lufthansa whose net loss in the first quarter proved to be stronger than expected by analysts.

Rising during the day, L’Oréal finally turned down (-0.5%) penalized by Estee Lauder who for her part plunged more than 20% on Wall Street due to lackluster prospects.

The gadin of the day is attributed to Imerys, which plunged by almost 10% after recording a stronger than expected drop in its volumes over the first three months of 2023.

On other markets, the euro gained 0.4% against the dollar at 1.1049 dollars. Oil for its part continues to fall, weighed down by fears of recession in the United States. North Sea Brent contract for July delivery drops 4.2% to $72.17 a barrel while June WTI contract dips 4.4% below $70 to 68.48 a barrel .