EuroStoxx 50: the factors behind a year of stagnation

The EuroStoxx 50 should end the year 2024 with gains, but without flavor due to a very long period of ups and downs.

The EuroStoxx 50 should end the year with gains, but without flavor

The EuroStoxx 50 is expected to close 2024 in positive territory, but the overall performance of the index remains relatively lackluster. If French investors will remember this year more vividly due to the clear underperformance of the CAC 40, other Europeans will probably quickly forget it. Since the beginning of spring, the euro zone’s flagship index has been moving up and down, after a start to the year marked by strong growth in the wake of international markets.

This consolidation phase, which has now lasted for more than eight months, can be explained by several major factors. The first is the persistent pressure on the Chinese economy and consumers, which has a heavy impact on luxury values. The latter, which have become particularly dominant in European indices in recent years, are bearing the brunt of weak Asian demand.

The second factor is the headwinds blowing across the global auto industry. This sector, essential for Europe due to the high concentration of manufacturers, is going through a period of turbulence which disproportionately affects the continent.
The political context in France constitutes a third element of fragility for the EuroStoxx 50. Since the dissolution of the National Assembly in June, the risk premium on French government bonds has increased, leading to generalized pressure on French assets , especially banks.

Finally, fears of an escalation in trade tensions between the United States and Europe following Donald Trump’s victory in the presidential election contribute to the lack of enthusiasm on European markets, despite the persistent upward momentum. of Wall Street.

EuroStoxx 50 weekly price chart – key levels

The first half of 2025 could offer good surprises for cryptocurrencies

From a technical analysis point of view, this seesaw development of the EuroStoxx is reflected by the formation of a “symmetrical triangle” since the beginning of spring. Given that the underlying trend is bullish, an exit from the top of the triangle is the preferred scenario, which would open the way to a new bullish rally lasting several months. Especially since the year 2025 could hold some good surprises, such as a successful revival of the Chinese economy, a resolution of the political crisis in Germany or even a peace agreement in Ukraine.

On the other hand, an exit from the bottom of the triangle is not improbable if the global economic outlook darkens, which would open the way to a correction to the low of early August at around 4500 points initially.