(CercleFinance.com) – The break of 7,150 points is confirmed and the CAC40 ends down 0.85% towards 7,124 points.
Paris is a victim of the downward inertia of last week (-2.5%): the decline is clearly amplified over the hours. The Dow Jones drops -0.1% and the Euro-Stoxx50 even sinks -1% towards 4,160, its worst mark since March 28: almost 3 months for nothing.
The stock market is suffering from economic uncertainties and the prospect of higher interest rates for longer, which continue to weigh on the trend.
Between the high level of interest rates, slowing growth in Europe, the slowdown of the Chinese economy and the prospect of a deceleration of investments, there is no shortage of reasons for concern.
Added to this is the specter of a partial closure of federal administrations in the United States (‘shutdown’) on October 1, following the recent blocking by Republican elected officials of a text on defense spending.
‘The negative elements are too present to offer hope of a new return to the major resistance of 7,360 points’, estimate the technical analysts at Kiplink Finance.
‘The average support at 7050 points could be quickly tested,’ they warn in a note published Friday (the CAC is trying to preserve 7,100).
The macroeconomic indicators expected in the coming week are indeed likely to confirm that a slowdown is indeed at work.
The Ifo business climate index in Germany rose from 85.8 in August to 85.7 this month, a level higher, according to Capital Economics, than the market consensus (85.2), but close to its own forecast (86).
Among the macroeconomic indicators on the menu for the week, there are also two statistics on inflation in the United States and the euro zone which could make the markets react.
In these conditions, investors are preparing for a return of volatility which has already seen the VIX, often nicknamed ‘barometer of fear’ on Wall Street, soar last week.
It is starting to approach the dangerous zone, i.e. 18.50 (it climbs +4% towards 17.9, more than 3% safety margin, it is very little.
This Monday, the return of concerns linked to the Chinese real estate giant Evergrande caused the Hong Kong Hang Seng index to stumble by almost 1.5%.
Over the week which has just ended, the Dow Jones lost 1.9% and the Nasdaq 3.6%, a decline which can be explained above all by the cautious approach maintained by the Fed.
Analysts are also concerned about the less enthusiasm shown for securities linked to artificial intelligence, whose valuations are considered more tense following their recent surge.
On the bond side, nothing to report: the yield on US Treasury bonds is stagnating at 4.44% (which remains close to the 4.50% threshold last week following the Fed’s comments).
Also stagnating in Bunds and OATs at their (bad) levels on Friday.
The oil market is on an upward trend despite the growing uncertainties surrounding the evolution of the global economy, and therefore the demand for black gold.
Brent reverses the trend and consolidates -1.3% to 92.6 dollars per barrel and American light crude (West Texas Intermediate, WTI) loses 1.4% to 89.10 dollars.
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