(BFM Stock Exchange) – The Parisian index has been 6% has been given 6% since the beginning of 2025 when its European counterparts experienced two -digit leaps. Even Wall Street, struggling since April, has exceeded the Parisian market. The difficulties of several heavy goods vehicles, including luxury, as well as budgetary and political uncertainties weigh the tricolor scholarship.

“Make Europe Great Again” (“Mega”) or “return its superb to Europe”. This slogan, a mirror of the “Make America Great Again” (“Maga” of Donald Trump, inspired a French entrepreneur who created a cap brandishing this injunction. The headdress was also proudly worn by the governor of the Banque de France, François Villeroy de Galhau, during the economic meetings of Aix-en-Provence, last week.

In the financial markets, this slogan has been used by analysts and strategists for several months. Deutsche Bank, for example, mentioned the term “Mega” to oppose it to the “American Maga” last March. One way for the German bank to highlight the outperformance of European actions in the face of American actions.

As we have written several times, the old continent has benefited from an important revival of investors’ attraction since the beginning of the year, thanks, for example, to the will of Germany to relaunch its growth by investing in defense and infrastructure.

Above all, the Trump administration has seized investors with its delays on customs duties or the threats of the American president on the independence of the American Federal Reserve (Fed).

Market operators have thus reallocated their portfolios, by reducing their exhibition to American markets to reinvest in other geographic area, Europe in mind.

Consequently, European scholarships have been on the rise since the start of the year. The Dax 40 of Frankfurt takes 22%, the IBEX 35 of Madrid advances by 20.8%, the FTSE MIB of Milan earned 17.2%. The FTSE 100 from London takes a little less (+9.4%) but signed a new record this week.

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The CAC 40, the Vilain Petit Duck of the Stock Exchange in Europe

The CAC 40 is completely distant. The large barometer of the Paris Stock Exchange takes barely 6% over the entire 2025.

The height of irony, Wall Street, which suffered in April after the announcement of Donald Trump’s reciprocal customs duties, has returned to the Paris Stock Exchange. The S&P 500 takes 6.4%

Since the beginning of the year, the Nasdaq Composite has advanced 6.8%.

How to explain such a sub-performance of the CAC 40? As for last year, during which the Parisian index also saw its performance being sealed by the dissolution of the National Assembly, in June 2024, and by the instability which followed, the response comes in part from the political situation.

In a note published at the end of June, Barclays pointed out that “investors (were) again more nervous with regard to France”.

The British establishment believes that the failure of negotiations between the social partners on the contours of the pension reform, with a motion of censorship which has not succeeded, has revealed the fragility of the French government.

Political uncertainty still weighs

“Although we did not expect a rehearsal of last summer stress, because it is unlikely that President Macron convenes new early elections even if the government is collapsing (it can simply appoint a new Prime Minister), we believe that the weakness of the macroeconomics, as evidenced by the bad PMI (Indicators of the private sector, editor’s note) and the potentially budgetary negotiations. Delicate, can justify a higher risk premium in French markets, “said Barclays.

“Even if we have used this political aspect, uncertainty has not disappeared,” said Alexandre Baradez, chief of market analysis for IG France. The specialist points to the famous “Spread” (the gap) between the borrowing rate on the debt title at 10 years of the French State and that of the same maturity of Germany, the usual thermometer of market stress on tricolor public finances.

“This Spread had exceeded 90 base points (0.9 percentage points, editor’s note) during the summer of 2024. It fell around 70 base points but remains below the 50 base points which were observed before dissolution. This means that the market is not completely reassured,” explains Alexandre Baradez.

The trajectory of French public finances remains scrutinized by investors. After a public deficit representing 5.8% of the gross domestic product (GDP) In 2024, the European Commission tried to a rate for France of 5.6% for 2025 and from 5.7% in 2026. Spain it would pass, according to the projections of Brussels under 3% this year (2.8%), Italy would come to 3.3%, Portugal would be close to balance (0.1%) while Greece would bring together (0.7%).

“The underperformance of France on the markets can come in part from this. A foreign investor will say that, in comparison, Germany is launching a budgetary boost, is little indebted and has a more active chancellor (Frierich Merz, editor’s note) only in the past, that Spain benefits from strong growth and that in Italy there is a certain stability with the policy of Giorgia meloni Budget trajectory “, develops Alexandre Baradez.

Luxury in the hard

Beyond these politico-economic aspects, the composition of the CAC 40 also plays. Alexandre Baradez notes that the financial sector (banks, insurance) has a relatively larger weight on the Milan and Madrid scholarships.

Three banks and insurers are among the five largest stock market capitalizations in the Milan Stock Exchange, and the figure is the same in Madrid. None appears in the “Top 5” in Paris. However, banks represent one of the sectors (with defense) that have been a hit in Europe since the start of the year. The Eurostoxx Banks, a pan -European sectoral index, takes 40% in 2025 while the Stoxx Europe 600 Insurance wins 16.6%.

In addition, the luxury, the flagship compartment of the Paris Stock Exchange and which represents around 30% of the total CAC 40 market capitalization (by integrating L’Oréal) is struggling.

LVMH drops 23.2% over the whole of 2025, Kering by 17%. Hermès, thanks to its ultra-resilient model and its very high-end positioning, evolves in green (+5.3%) but underperform the CAC 40.

This sector is struck hard by a demand at half mast for luxury products but also by uncertainties caused by American economic policy.

LVMH, which constitutes a good compartment barometer in view of its various activities, saw its income fall by 3% in comparable data over the first three months of 2025. UBS and Bank of America anticipate a drop of 4% for the second quarter.

“Until the end of February everything went very well and then we arrived in front of a global geopolitical and economic situation which was turned upside down by potential customs duties, by worsening international crises, which disrupted a bit on March,” said Bernard Arnault, his CEO.

“The observation for luxury looks a little like that which can be made on Apple (which has lost 16% since the beginning of the year, editor’s note) on the S&P 500. Growth has diminished, the trade risks appeared and these titles can suffer from the rise in the euro. But there is above all the question of Asia and China where the growth of luxury is stopped. Engine, luxury has become a weight for a few quarters, “said Alexandre Baradez.

Schneider Electric and Totalenergies in pain

The other heavyweights of the CAC 40 are not in great shape either. Schneider Electric, who has the strongest weighting in the calculation of the index, that is to say that his variations are those which have the most influence on the CAC 40, loses 6.5% on 2025.

The specialist in electrical equipment and energy efficiency technologies is now very exposed to the theme of artificial intelligence (AI). To ensure their development in AI, large tech groups need data centers, very energy -consuming structures. This makes demand for the French group’s products, to the point that data centers are the major growth vector of the company.

Schneider Electric was first sealed by the boom in the Chinese start-up Deepseek, whose prowess at a lower cost had cast doubt on the enormous expenses of tens or even hundreds of billions of dollars provided by the American “Big Tech” in the AI.

Press information reporting that Microsoft and Amazon planned to lift your foot on the data centers a little weighed the action. The growth of the group’s first quarter of the group has also disappointed the market.

Totalnergies, the second largest CAC 40 weighting, has died of the drop in oil prices. In the first quarter of 2025, its net profit fell by 33%, penalized by an average decrease in the Brent barrel by around 9%. The second quarter may prove to be the same ilk. Brent prices stood up between 58.4 dollars and $ 79.4 a barrel over the period, according to Investing.com data. However, in the second quarter of 2024, the average price of the Brent chosen by the company had been 85 dollars.

In addition, the accounts of the first quarter had been quite poorly welcomed by the market, the title then fell by more than 2%. The rise in net debt had made investors waved. The action is barely 1% in 2025

Towards a second best half?

Should we expect the underperformance of the CAC 40 to continue on the second part of 2025? Alexandre Baradez wants to be optimistic.

The market specialist has the feeling that the dynamics of China “improve” and thus carry luxury, while the Prime Minister, Li Qiang considered that domestic demand needed to be more supported and that “economic indicators stabilize”.

In addition, “for industrial groups of CAC 40, the rise in the euro against the dollar is not necessarily a bad thing because it can reduce the cost of certain raw materials,” he argues.

Alexandre Baradez, however, expresses concern, fearing that a drop in American markets this summer has negative collateral effects on the CAC 40.

“American actions are expensive, while the Fed has not yet dropped its rates and the effects of commercial measures are not yet fully felt. Summer periods are often calm but we have seen stress phases, for example in 2015 with the Chinese markets, and I find that the calendar lends itself to it this year,” he said.

“If the S&P 500 were to drop 10% during the summer after the results period, I think that the CAC 40 would be sensitive,” he concludes.