Why the Paris Bourse is soaring despite economic and social tensions in France

The Paris Bourse takes off: this Monday, March 6, the CAC 40 even exceeded 7,400 points, it’s a first! The markets seem insensitive to the discontent which agitates the country with the pension reform, indifferent to the messages of certain trade union leaders who call to block the economy of the country to make capitulate the government. This surge in stock market prices seems incomprehensible, even indecent. Stock market operators have in fact turned their eyes in another direction, that of global monetary policies.

>> Stock market: why the financial markets are breaking new records

In a general context of a sharp rise in interest rates, the chairman of the United States Federal Reserve, the FED (the equivalent of our European Central Bank), must today reveal his intentions in this area. Its president, Jerome Powell, must come out in favor of a continuation of the rise in interest rates, in order to fight against inflation, but this rise would be slower and more regular, less violent than the rate hikes we have seen. these last months.

Another element plays in favor of shares on the stock market: employment figures in the United States. The next ones will be released on Friday March 10th and they should be good.

The Paris Stock Exchange supported by its good results abroad

In addition to monetary policy expectations, there are also the excellent results achieved by companies over the past year as a whole. All the profits of companies listed on the CAC 40 are not yet published for 2022, but the total profits already exceed that of 2021. The cumulative annual profits already amount to 140 billion euros, against 128 billion over the same period. of 2021.

Two sectors held up particularly well: energy and luxury. Energy with the war in Ukraine which has increased oil and gas activity. We see the results of TotalEnergies (19.5 billion euros in profits in 2022). And then luxury: LVMH, Hermès, L’Oréal, Kering (ex-Pinault Printemps Redoute): 4.5 billion euros in cumulative profits over one year, or 80% more compared to 2019 before the pandemic.