Market: caution, results come first

( – The Paris Stock Exchange should open almost unchanged on Monday morning, with investors opting for caution before the ramp-up of the quarterly corporate results season scheduled for this week.

Around 8:15 a.m., the ‘future’ contract on the CAC 40 index – delivery at the end of April – gained 9.5 points to 8,023 points, announcing a stable start to the session, or a very slight increase.

For almost a month, world stock markets have been standing still, even consolidating sluggishly, as inflation awakens in the United States and increasingly cautious statements from Fed officials.

Faced with doubts surrounding the timetable for a first rate cut across the Atlantic and an economic recovery which is still struggling to materialize in Europe, the stock markets are following a bumpier path.

In Paris, the CAC 40 index – which was still flirting with the major resistance of 8250 points at the end of March – lost 2.4% in less than two weeks to now move not far from its important support of 8000 points.

On Wall Street, the three major indices have just posted two consecutive weeks of decline, after having previously posted nine weeks of progress in a row.

These uncertainties have pushed gold to new records, with traders worried not only about the re-acceleration of inflation in the United States, but also about current geopolitical tensions and the increase in public debt.

At the same time, volatility measured by the CBOE VIX index – often called the fear index – has rebounded to levels not seen since last fall and the Hamas attacks against Israel.

On the bond market, the pause on Wall Street did not favor a return on Treasuries, the yield on the American ten-year having climbed to 2.50%, a new annual plus.

With the earnings ‘season’ set to begin in full swing from this week, investors will be able to test the fundamentals of the market through the accounts of listed companies.

As for the results of American groups, FactSet data only predicts an increase of 0.9% in profits in the first quarter, compared to another 3.4% at the end of March.

Some 44 companies belonging to the S&P 500 index, including six Dow Jones stocks, will publish their accounts this week.

While JPMorgan’s performance disappointed last Friday, the accounts of Goldman Sachs – expected at midday – then those of Bank of America and Morgan Stanley (tomorrow) will be particularly followed by the markets.

The announcements from Johnson & Johnson, Netflix and Procter & Gamble will also be closely monitored in the coming days.

In Europe, the week will be mainly animated on Wednesday by the results of ASML, one of the locomotives of the recent rise in European markets, then of Nokia.

According to analysts, favorable publications – and not just confined to the technology sector – would promote a stock market recovery by reinforcing optimism regarding stocks.

As for economic indicators, retail sales figures are expected in the United States, which will fall today, as well as those for industrial production, which will appear tomorrow.

Investors’ eyes will also turn to Beijing, where Chinese gross domestic product (GDP) figures will be published tomorrow, providing valuable clues about the recovery of the world’s second-largest economy.

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