The Paris Stock Exchange caught its breath on Tuesday at midday (-0.28%) after having recently strongly progressed thanks to advances in terms of vaccines against Covid-19 which strengthen confidence in an improvement in the economy.
Around 1:00 p.m. in Paris, the CAC 40 lost 0.28% to 5,455.95 points. In London, the FTSE 100 yielded 1.18% and in Frankfurt, the Dax fell 0.43% as a result of profit taking.
Futures heralded a downward opening on Wall Street on the Dow Jones and the broader S&P 500 index.
“The market certainly needs to breathe,” after its bullish movement of the past two weeks, said Stephen Ausseur, deputy head of investments at Natixis Wealth Management, during an online conference.
After Pfizer / BioNTech last week, the American biotech company Moderna announced Monday that its vaccine candidate was 94.5% effective, boosting stock indexes.
“The excitement has subsided” and “investors are reducing some of their exposure to equities,” notes David Madden, an analyst at CMC Markets.
“If the underlying trend remains supported by the major advance represented by the vaccine candidates of Moderna and Pfizer, investors know that there is still a long way to go before a real recovery in the global economy“, explains Franklin Pichard, CEO by Kiplink Finance.
“The doubts could also prevail before the publication of a salvo of American statistics, in particular of retail sales and industrial production in the United States“, he adds.
– What rebound power? –
With the prospect of effective vaccines, investors are confident that the health crisis will not last and that economic activity can rebound, but the question is whether the catching up will be enough.
On both sides of the Atlantic, it will probably be necessary to wait until the summer of 2021 for a return to normal, with a high proportion of the population vaccinated and the duration of the protection conferred by a vaccination is still unknown.
The concrete prospects of a vaccination and the election of Joe Biden to the White House with a probably divided Congress are elements “rather positive in the medium term for the prospects of revaluation of the growth”, estimates Mr. Ausseur.
But, he adds, “markets may face some degree of uncertainty over the impact of the second lockdown” or other new restrictions put in place to contain the second wave of the epidemic.
Faced with this challenge, US President-elect Joe Biden urged Congress on Monday to vote “quickly” on a new plan to help households and businesses, so that the country can recover sustainably.
The American central bank (Fed) could extend its program of repurchases of assets including Treasury bills, said its vice-president Richard Clarida on Monday.
THE OIL SECTOR WEIGHTS ON INDICES: BP (-1.52% to 246.95 pence), Royal Dutch Shell (-1.05% to 1.228 pence) and Total (-0.80% to 33.96 euros) were barely before a meeting of OPEC + members which could pave the way for an extension of the current cuts in their crude production.
EASYJET IN THE RED (-2.96% to 754.60 pence): the airline fell into the red for the first time, due to the Covid-19 pandemic, with a loss of more than a billion pounds on all of his staggered exercise.
BANCO DE SABADELL MONTE – Spain’s second largest bank BBVA has indicated that it is leading discussions on a possible merger with Banco de Sabadell (+ 2.12% to 0.43 euro), the country’s fifth bank.