Carried by Stellantis and Société Générale, the CAC 40 crosses 6,700 points

The Paris Stock Exchange flies from record to record. After registering a new annual high point on Monday, the CAC 40 continues to rise. Tuesday morning, he crossed the threshold of 6,700 points, thanks to the good results of Societe Generale and Stellantis. It closed at 6,723.81 points, up 0.72%, after coming close to 6,750 points at the start of the afternoon.

Main driver of the CAC 40, Societe Generale jumped 6.4%. Banque de la Défense returned to profit in the second quarter, thanks to the resumption of retail banking activity in France and the decline in provisions for bad debts. The restructuring of the group is beginning to bear fruit and the bank now expects an increase in revenues from all its businesses in 2021. A time neglected by investors, the title has recovered more than 55% since the beginning of the year.

Stellantis, born from the merger between PSA and FCA in January, took 4.1%. Record profitability and the success of pickups and SUVs in North America and Europe have eclipsed the impact of the chip shortage. The world’s fourth-largest automaker has also raised its target for the year.

The CAC 40 is at its highest since September 2000

Rebound in favor of corporate results

Global financial centers have rebounded sharply over the past two weeks. “The good results of companies in the first half of the year relegated macroeconomic concerns to the background,” explains Emmanuel Cau at Barclays.

“After a very good first quarter, investors feared that growth would slow down. But listed companies have shown their ability to resist less brilliant macroeconomic news. Contrary to what generally happens, the good news was not already incorporated into the courses at the time of the publication of the results.

So far, 65% of companies in the European STOXX 600 – and 91% of groups in the S&P 500, the large Wall Street index – have published results above the expectations of market analysts.

“Margins are resisting, the stock market giants still have significant pricing power and they are showing fairly optimism. All of this reassures investors, ”continues the Barclays analyst.

Weight of banking and luxury stocks

The European markets, led by the Paris Stock Exchange, are supported by the acceleration of the recovery on the Old Continent. This time, the comparison works in their favor. Beijing is increasing the regulatory constraints imposed on its listed companies. And in the United States, the Fed is preparing people’s minds for a tapering (slowdown in asset purchases on the market).

“The CAC 40 benefits from two specific factors: the weight of banking and luxury stocks”, explains Frédéric Rollin at Pictet. The former react strongly once the recovery is confirmed, which allows them in particular to lower their provisions for non-performing loans. Analysts classify them among the “late cyclicals”. As for luxury stocks, they are benefiting from Asian growth. In addition, they had to step up digital during the health crisis, “which allowed them to reach new markets, for example medium-sized Chinese cities where brands did not have stores. “

What, no doubt, explain the difference in performance between the Parisian index and other European benchmarks. Since the start of the year, the CAC 40 has gained 21%, against 13% for the German DAX, 14% for the Italian MIB, 9% for the Spanish IBEX and 16% for the Euro STOXX 50 50.

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