The stock market has been soaring since October, with the CAC 40 in the lead. But can this spectacular rise last or does it herald a reversal?
The Cac 40 crosses 8,000 points: The stock market under tension
Just like the roller coaster of bitcoin (BTC) and other cryptocurrencies, the CAC 40 is also experiencing its share of turbulence. In turn, it approaches dizzying peaks before plummeting into unfathomable abysses.
THURSDAY, the Cac 40 reached a new peak, exceeding 8,000 pointswith a stable, precise expected opening The echoes. On Wall Street, the main indexes also climbed, boosting theinvestor optimism. John Augustine of Huntington Private Bank attributes this dynamic toabsence of major economic or political crises.
The ECB played a crucial role in raising the possibility of reduce key rates in June, thus boosting investor confidence. This prospect should support growth and make equities more attractive, by reducing the remuneration of government bonds.
However, Neuberger Berman predicts an increased risk of recession in 2024, with an expected drop in inflation. Although the ECB remains cautious, Christine Lagarde is closely monitoring wages and corporate profits, while the likelihood of a key rate cut increases, reassuring investors.
The fatigue of the American economy: The stock market in hope
Signs of weakness in the US economy portend a reduction in key rates from the FED to come. Recent data, such as reduction in household consumption and confidence at half mast, fuel this perspective. In addition, US employment figures confirmed this trend, with a downward revision of jobs created in January.
Ebury points out that the job market is weakening, which encourages investors to anticipate a first rate cut from the FED. This forecast is supported by the rising unemployment rate and slowing wages, factors that are expected to dampen inflation. Fidelity summarizes the situation this way: most central banks, including the Fed, could lower their key rates this year, while some emerging countries have already started to do so.
The feverishness of American employment: An economic barometer under tension
In the great economic theater, all eyes are on America. THE employment figures, true market compasses, are scrutinized with feverish attention. The latest data on jobless claims and private employment paint a mixed picture, revealing a softening but solid job market.
However, it is the official jobs report that will hold the ultimate truth. The expectations are palpable: 200,000 job creations expected in February, with an unemployment rate stable at 3.7% and wage growth slowing. A different scenario could have instant and significant repercussions on global markets, warns Tony Sycamore, analyst at IG.
At the same time, Europe is holding its breath. The eurozone’s GDP estimate and Germany’s industrial performance, although nuanced, raise concerns about economic stability. Challenges persist, particularly in construction and industry, signaling a period of economic uncertainty to come.
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