(CercleFinance.com) – The Paris Stock Exchange should move down slightly on Monday morning at the start of a session that promises to be without a clear trend due to the closure of Wall Street.
Around 8:15 a.m., the ‘future’ contract on the CAC 40 index – now passed on the July deadline – fell by 6.5 points to 5857.5 points, announcing an opening around equilibrium.
The massive sell-offs suffered by the Parisian market since the end of May give hope for the emergence of a scenario that would allow market fundamentals to regain the upper hand.
The past week has taken on the appearance of capitulation with weekly losses of more than 5% in Paris, bringing the slide since the beginning of June to 8.5% and the correction signed since January 1 to 17.5%. .
The market decline – which has allowed a return to more reasonable valuations – may prompt investors to pay full attention to economic data, which shows that the economy can avoid recession.
However, the fears surrounding the possibility of entering a recession are beginning to have a worrying cost, in particular by encouraging companies to opt for a wait-and-see attitude in their investments and to give up on increasing their workforce.
“The concern about the risk of recession has a cost for the economy,” warns William De Vijlder, chief economist of BNP Paribas.
‘If the fears of a slowdown contribute to the effectiveness of the transmission of a restrictive monetary policy, beyond a critical threshold, they become self-fulfilling,’ he underlines.
The agenda in terms of economic statistics looks relatively thin at the start of the week and should remain so until Thursday and the publication of the PMI indices in Europe and the United States, which should make it possible to know whether the hypothesis of a recession must be taken increasingly seriously.
The severe tightening of the monetary policies of the major central banks in order to combat soaring inflation will also remain a major point of attention, given the risks that this poses to global economic growth.
In the meantime, Monday’s session should remain relatively calm in the absence of Wall Street, closed for the newly celebrated Juneteenth end of slavery day.
From a technical point of view, the CAC 40 succeeded on Friday in preserving the 5880 point level in extremis, thus sparing itself a relapse towards 5645 points, a level which would correspond to a 50% retracement of the rise which wore between February 2020 and January 2022.
For the time being, the first significant reference support is at 5750 points, the lowest of the year, a price that had been tested at the start of the Russian-Ukrainian conflict.
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