(CercleFinance.com) – Wall Street should open without much change on Tuesday morning, as investors struggle to find elements allowing them to fuel the bullish movement of the past few weeks.
Half an hour before the open, futures on major New York indices are all hovering around equilibrium, signaling an uncertain open.
Nothing seems capable of dictating a real trajectory to the equity markets, while market participants have very little information to influence their investment choices.
With the exception of the foreign trade figures, released this morning, the start of the day is completely devoid of leading economic statistics or important company results.
The trade deficit widened to $78.2 billion in October from $74.1 billion a month earlier, according to the Commerce Department.
In short, the beginning of December is proving to be rather sluggish, which seems to favor a return to profit taking.
However, the underlying upward trend does not seem to be called into question by the consolidation movement.
The Dow Jones recently returned to less than 7% of its all-time high, on the back of ebbing inflation expectations and the prospect of a ‘soft landing’ for the economy orchestrated by the Fed.
According to this scenario, the US central bank would manage to bring inflation down by gradually raising its rates, without for all that pushing the economy into recession.
Despite the recent rebound, however, some analysts note the factors of uncertainty remain numerous and unpredictable.
Stronger than expected macroeconomic indicators, likely to justify further rate hikes, could in particular start to dampen market hopes.
In a recent strategy note, La Financière de l’Echiquier warned against an optimism that could quickly turn into ‘irrational complacency’.
“For the trend to continue, other good news would be needed, starting with confirmation that US inflation is experiencing a real deceleration,” warns Enguerrand Artaz, manager at LFDE.
‘For lack of new catalysts, and even more so if less positive signals reappear, the markets, which celebrated Christmas before their time, may well pass the truce of the confectioners with a hangover,’ he warns.
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