CAC 40: records put to the test of inflation in the USA – 05/13/2024 at 08:25

CAC 40: records put to the test of inflation in the USA – 05/13/2024 at 08:25
CAC 40: records put to the test of inflation in the USA – 05/13/2024 at 08:25

(CercleFinance.com) – After the strong rebound recorded last week, the fine performance of the Paris Stock Exchange will be put to the test this week with a host of economic indicators, starting with the latest inflation figures in the USA.

Around 8:15 a.m., the ‘futures’ contract on the CAC 40 index, however, traded around 8,222 points, up 14 points, a harbinger of a continuation of the recovery that began last week.

The Parisian market gained almost 3% over the past week to establish both a new historic ‘intraday’ high above 8,259 points and a new absolute record closing at more than 8,219 points.

Market optimism does not only support the CAC, since absolute records have continued to rain down all over Europe for around ten days, from London to Frankfurt via the pan-European STOXX 600 index.

‘The appetite for risk is increasing again across all markets with remarkable consistency, from stocks to bonds, including credit and commodities,’ notes Florian Ielpo, at Lombard Odier.

The American stock markets – which have just posted three consecutive weeks of increases – are for their part a stone’s throw from their historic highs.

If the speed and scale of these gains may raise fears of an imminent decline, the market could well find new momentum if the CAC manages to rise sustainably above its major resistance of 8250 points.

Until now, the threshold of 8250 points has represented an important management point for investors, synonymous with partial profit-taking, which has prevented the psychological threshold of 8500 points from reaching.

The ability of the Parisian market to exceed this key level will be tested over the coming days by a busy program in terms of indicators, including figures for retail sales and industrial production across the Atlantic.

These figures will be closely monitored as the picture painted by the latest American statistics has been a little more mixed recently, suggesting a slowdown in growth.

For example, American consumer sentiment fell back to its lowest level in six months in May, due to a bout of pessimism surrounding inflation, but also unemployment and interest rates.

The highlight of the week will nevertheless be the consumer price figures in the United States for the month of April, which will fall on Wednesday.

While inflation has tended to surprise on the rise in recent months, investors are counting on a slight slowdown in price increases, which would validate the scenario of future rate cuts.

‘We recommend building portfolio positions based on all possible scenarios, but with a bias favoring the prospect of rate cuts,’ underlines Angelo Kourkafas, strategist at Edward Jones.

On the agenda for the week is also a speech by Jerome Powell, the president of the Fed, who will speak at the annual conference of the Association of Foreign Bankers organized in Amsterdam.

If 92% of the components of the S&P 500 have already published their quarterly results, several American distribution heavyweights have yet to report their accounts this week, including Walmart and Home Depot.

The American networking equipment giant Cisco will also publish its first quarter performance.

In Europe, several leading groups such as Allianz, Bayer, Deutsche Telekom, Siemens and Vodafone are also due to take part in the exercise this week.

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