Paris Stock Exchange opened down 0.4% at approximately 7845 points, mainly impacted by a 2.7% decline in Sanofi and drops in major banks. Attention is on Donald Trump’s upcoming speech regarding tariffs, with potential chaos in international trade anticipated. Analysts warn that tariffs could adversely affect sectors like automotive and pharmaceuticals, possibly reducing U.S. growth and exacerbating inflation. In corporate news, Legrand is acquiring CRS, and Crédit Agricole is boosting its stake in Banco BPM.
Market Update: Paris Stock Exchange Experiences Decline
The Paris Stock Exchange has opened with a dip of 0.4%, hovering around 7845 points. This downturn has been significantly influenced by Sanofi, which has seen a drop of 2.7%, along with major banks like BNP Paribas and Société Générale, which fell by 2.2% and 2% respectively.
Investors Anticipate Trump’s Speech on Tariffs
Eyes are on the Atlantic as Donald Trump prepares to address the nation this evening, aiming to clarify his forthcoming tariff strategy. The New York businessman has referred to this day as ‘Liberation Day,’ suggesting it will usher in a ‘wonderful and simple system.’ However, concerns persist regarding the potential fallout from these measures.
Editorialists from ‘The Economist’ have raised alarms, stating that the proposed actions from the U.S. administration could lead to ‘complete chaos’ in international trade. Analysts speculate that Trump may opt for a series of gradual and targeted tariffs instead of a sweeping universal plan.
Industries with significant international exposure, such as automotive, luxury, and pharmaceuticals, could face adverse effects from these announcements, according to UBS analysts. They predict that these sectors may see a decline of up to 10% if earnings forecasts are revised downward.
Deutsche Bank strategists have also warned that widespread customs surcharges could trigger a ‘huge’ shock, with dire consequences for the global economy. Their projections indicate that a protectionist stance could reduce U.S. growth, currently estimated at 2.3% for this year, by 100 to 120 basis points, while also reigniting inflationary pressures.
In Europe, implementing a 20% tariff on all goods, combined with the already anticipated 25% tariffs on automobiles, could dampen growth on the continent by 0.3% to 0.6% this year. Retaliatory actions from countries like China, the European Union, or Canada are also likely, which could lead to an escalation of the ongoing trade war.
As the day unfolds, investors are encouraged to stay alert to the latest economic indicators. Key reports expected from the U.S. include industrial orders, the ADP private employment survey, and weekly oil inventory figures.
In the bond market, 10-year U.S. Treasury Bonds are currently yielding 4.16% (+1pt), while 10-year Bunds sit at 2.67% (-1pt), and OATs remain stable at 3.39%.
In corporate news, Legrand has announced its acquisition of Computer Room Solutions (CRS), a prominent Australian firm specializing in the design and development of clean room infrastructure for data centers. Crédit Agricole SA has received approval from the ECB to increase its stake in Banco BPM to 19.9%, aligning with its long-term investment strategy. Additionally, Alstom has secured public funding of 2.4 million euros for its Intelligent and Innovative Automation Platform for Safety & Digitalization through Integrated Execution Architecture (project named PAIISDAIX).
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