“Paris Stock Exchange and Global Markets React to Biden-McCarthy Deal on Debt Ceiling”

The Paris Stock Exchange, which rose up to 0.5% for the Cac 40 this morning, finally closed down (-0.21% to 7,303.81 points) this Pentecost Monday session, a public holiday but not unemployed on the steps. Finally, some markets more exactly. The places of Copenhagen (Denmark), Budapest (Hungary), Reykjavik (Iceland), Oslo (Norway) and Zurich (Switzerland) remained closed today, as well as those of Wall Street in the United States and London. This year, Whit Monday falls on the same day as Britain’s Late Spring Bank Holiday and America’s Memorial Day, a day that honors fallen armed forces in all wars. This is why trade volumes only totaled barely 1.5 billion euros on the Cac 40, the lowest of the year.

Still, one might have hoped for more enthusiastic investors coming out of a weekend in which Joe Biden, the White House tenant, and Kevin McCarthy, the Republican Speaker of the House of Representatives, finally struck a deal. of principle on raising the debt ceiling and rationing federal spending: they will be stable in 2024 before a small increase of 1% in 2025. This agreement in principle constitutes a crucial first step to avoid a default in payment of the first world power with dramatic repercussions, both for the economy and finance, which could, however, still occur in seven days if the Congress does not vote this week on the text.

According to new Treasury calculations, the US government will run out of money not on June 1 but on June 5.

It now remains for the negotiators to convince lawmakers on both sides, Democrats and Republicans, to vote for the agreement. But in an increasingly politically polarized world, objections abound, and in recent hours Democrats have publicly done what they rarely do: criticize the president. They especially regret that Joe Biden has given in to Republican demands to impose stricter work requirements on the poorest Americans to receive food aid. As for the most right wing of the conservatives, the parliamentarians of the “Freedom Caucus” in particular, they reproach Kevin McCarthy for having accepted an agreement which does not include frank cuts in overall spending.

“It is easier said than done to get an agreement approved by the House of Representatives and the Senate”comments Tim Waterer, chief market analyst for forex and CFD broker KCM Trade.

In this context, and pending future developments, almost three-quarters of the components of the Cac 40 end up in the red, with, among the ranks of the largest declines, Worldline, STMicroelectronics et EssilorLuxottica.

Conversely, the manager of shopping centers Unibail-Rodamco-Westfieldyet very present in the United States, posted the best performance of the day with a gain of 1.16%, after hitting a low for the year on Friday.