(News Bulletin 247) – The Paris Stock Exchange approaches this new week feverishly, while no agreement has yet been reached on the American debt ceiling. The CAC 40 closed slightly down 0.2% at 7478.16 points on Monday evening.

For this first session of the week, the Paris Stock Exchange walked on eggshells. Already very hesitant at midday, the CAC 40 closed down slightly by 0.18% to 7478.16 points, as investors closely scrutinized the evolution of negotiations on the American debt ceiling, which are struggling to move forward.

On Friday, however, the Paris star index had rebounded by 0.6% carried by the hope of a favorable outcome on this thorny question.

Short-term uncertainty

But these hopes were quickly dashed, as no agreement was reached. US President Joe Biden on Sunday deemed “unacceptable” the proposals of the Republicans, who demand significant federal budget cuts for an agreement to succeed. This does not prevent Joe Biden and the leader of the Republicans in the House, Kevin McCarthy, from resuming the path of negotiations. The fateful date is fast approaching, the two camps have ten days to avoid default by the world’s largest economy.

“We remain of the opinion that the worst will be avoided. There will be no default. But the uncertainty pushes us to remain cautious and therefore not to run behind the market”, underlines Sebastian Paris Horvitz, of La Banque Postal Asset Management.

“At this point equity markets are not overly concerned about issues surrounding the US debt ceiling, and investors believe the Federal Reserve [Fed] US will begin a pause in its rate hikes. The statements this weekend from Neel Kashkari, the president of the Minneapolis Fed, are rather likely to reinforce this hypothesis.

Neel Kashkari, a member of the Fed on the side of the “hawks”, i.e. the central bankers more favorable to a restrictive monetary policy, told the wall street journal that he could support a status quo on rates at the next meeting in June.

Dead news

On equities, relatively few movements with regard to a not very rich news on Monday. Ubisoft resumed the upward path (+1.4%) after being heckled on Friday by a downgrading of UBS’s recommendation to “sell”.

Air France-KLM (+2%) benefited from a positive cross-reading of the results of Ryanair which gained 1.3% in Dublin. The Irish airline recorded a jump in its results for its entire 2022-2023 financial year, with a profit of 1.43 billion euros, close to its all-time high.

Sanofi ends down 1.3% while the pharmaceutical group presented Sunday positive results in the treatment of chronic obstructive pulmonary disease at an international congress.

On the other markets, the euro gained 0.2% against the dollar at 1.0801 dollar. Oil prices are picking up a few colors. July’s North Sea Brent contract rose 0.5% to $75.95 a barrel, while the same-maturity WTI contract listed on the New York Stock Exchange also rose 0.5% to $72.03 a barrel.