(News Bulletin 247) – The CAC 40 is making significant progress on Monday, benefiting from cheap buybacks, as the market tries to assess the consequences of Joe Biden’s withdrawal from the race for the White House.

The Paris Stock Exchange is off to a good start for the week so far. The CAC 40 gained 1.3% at mid-session on Monday, to 7,630.94 points, probably benefiting from cheap buybacks after losing nearly 2.5% over the whole of last week.

The news is dominated by American politics. On Sunday, the outgoing American president, Joe Biden, announced that he was giving up running for a second term. His vice-president, Kamala Harris, has declared herself ready to replace him and has received many endorsements, including that of Joe Biden himself. The Democratic candidate will be chosen at a convention scheduled from August 19 to August 22 in Chicago.

“For the markets, this casts doubt on the bets that almost gave as a given that Donald Trump would be elected, which had given a boost to risky assets, notably due to the potential new tax cuts,” judges Sebastian Paris Horvitz, of LBPAM.

“Obviously, the new situation could induce some volatility in the short term,” he adds.

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A whirlwind of publications to come

For now, the announcement has not caused a major reaction. Wall Street is expected to rise slightly, with the S&P 500 futures contract gaining 0.35%. The dollar is almost stable against the euro, falling 0.1% to 0.9180 euros.

“In the short term, in connection with Biden’s withdrawal, it would not be surprising to see a slight catch-up of European risky assets compared to the United States after several weeks of clear underperformance,” explains Michaël Nizard, of Edmond de Rothschild AM. “Because in fact, several econometric studies show significant impacts on European growth, of the order of 1%, in the event of a resurgence of strong trade tensions linked to Trump,” he adds.

The Paris Stock Exchange is preparing to dissect an avalanche of results, with the bulk of them arriving mainly in the coming days. This week, 25 CAC 40 companies will publish their first-half results, including 13 on Thursday, July 25 alone.

For the moment, the real estate companies Icade and Covivio published their accounts this Monday morning, passing the test rather well, since Icade gained 4.6% and Covivio 1.2%.

Vivendi, for its part, gave more details on its plan to split into four listed groups, planning to list Canal+ in London and Havas on the Amsterdam Stock Exchange.

Oil is sluggish. The September contract on North Sea Brent is down 0.05% at $82.59 a barrel while the August contract on WTI listed in New York is down 0.1% at $78.55 a barrel.