(News Bulletin 247) – Wall Street is moving on an irregular note on Friday, supported on the one hand by containment relief measures in China but affected on the other by the constant worries surrounding the health of the economy.

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At the end of the morning, the Dow Jones fell 0.4% to 33,576.6 points, while the Nasdaq Composite still retained gains of 1.2% to 11,243.6 points.

These contrasting performances did not prevent the two indices from making appreciable gains over the week as a whole. Since Monday, the Dow has risen nearly 3.8%, where the Nasdaq has jumped 7.3%.

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The positive reaction of the stock markets yesterday to the slowdown in inflation testifies to a better mood among investors, but they seem to want to remain cautious in the face of the current macroeconomic context.

“It is probably too early to return aggressively to the equity markets given the lack of visibility, partly linked to geopolitical instability,” said Gilles Guibout, at AXA IM.

For the rally to continue, the geopolitical situation would have to ease a little, but also that the outlook for corporate earnings improve, strategists point out.

“We may not be very far from it, but we are not there yet,” said Alexandre Baradez, head of market analysis at IG France.

“The risk in the coming days is that macro data will continue to reflect the economic slowdown, providing a headwind to equity markets with another small uptick in volatility,” he added.

At Pictet Asset Management, Raymond Sagayam recalls, however, that the context calls for caution.

‘Even if inflation appears to be easing, it probably won’t slow as fast as central banks thought it would a year ago,’ the manager warns.

‘It is therefore still too early to claim victory in the war against inflation,’ he concludes.

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