French Election Results Spark Global Stock Market Rebound: Key Insights and Expert Analysis

Impact of French Election Results on Global Stock Markets

Paris, July 10: Global stock markets rebounded on Monday after Marine Le Pen’s far-right party fell short of expectations in the first round of French parliamentary elections.

Monday Market Moves:

• European stocks surged 0.31%, led by the CAC 40’s 2.19% gain.
• The euro rose 0.13% against the US dollar.
• US markets opened higher, with the Dow Jones Industrial Average gaining 0.11% and the S&P 500 up 0.08%.

Election Impact:

The strong showing by traditional parties in the first round allayed fears of a Le Pen victory, which had been seen as a risk to market stability. With a hung parliament now likely, investors are expecting a period of political stalemate that could limit the far-right’s influence.

Upcoming Economic Data:

Investors are now closely monitoring upcoming economic data, including Fed Chair Jerome Powell’s remarks, the minutes from the Fed’s latest policy meeting, and US non-farm payrolls data due on Friday. These data will provide clues on the likelihood of interest rate cuts by the Fed.

Technical Analysis:

• FTSE 100: The FTSE 100 is expected to rise further, with the 55-day simple moving average (SMA) at 8,236 as the next upside target.
• DAX 40: The DAX 40 is bouncing off the 18,000 mark, with the 11 June low at 18,278 and 55-day SMA at 18,363 representing potential upside targets.
• CAC 40: The CAC 40 has recovered from election jitters, with the 200-day SMA at 7,640 as the next upside target.

Expert Views:

“The French election result wasn’t as bad (as expected) and sometimes positioning matters,” said Wasif Latif, President and Chief Investment Officer at Sarmaya Partners. “There’s going to be a big week for payrolls even though they’re shortened trading so liquidity might be a little bit low as we head into the weekend.”

Outlook:

Global stock markets are likely to continue their recovery on expectations of a stable political environment in France. However, the upcoming economic data could shape the market sentiment and influence the trajectory of interest rates.