JPMorgan says France's political backdrop remains challenging ahead of next year's elections, with little positive progress likely before them, yet investor sentiment is so downbeat that some French-exposed stocks could see a relief bounce. Strategists led by Mislav Matejka note that the CAC 40 has underperformed for 3 years and its relative price-to-earnings ratio sits at record lows, while French domestic plays and banks have lagged the broader index significantly. They do not expect French risk to spread into broader Europe, citing stronger banks than during the euro crisis, low credit defaults and the European Central Bank as a credible backstop. The team also flags CAC 40 companies that generate more than 75% of revenue outside France, where price and earnings performance has diverged sharply. Strategists do not expect investors to sustainably re-engage with French exposure until the main political risks pass, and favor being overweight non-French domestic exposure versus French exposure in the medium term.
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Related tickers and likely impact
EUR/USD
• NeutralRelevance: low
| Market | Currencies |
|---|---|
| Close on 10/23/2026 | 1.12044 |
| Change that session | -0.11% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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