(News Bulletin 247) – The Paris Stock Exchange should start slightly higher on Monday in a market that looks sluggish in the absence of Wall Street, closed today due to the celebration of ‘Labor Day’.

Around 8:15 a.m., the ‘futures’ contract on the CAC 40 index – delivery at the end of the month – rose 29.5 points to 7337 points, suggesting a continuation of the upward series that began in mid-August.

By winning 1.2% last week, the Paris market had managed to align a second consecutive week of growth, supported by the decline in bond yields caused by the many signs of economic slowdown.

The figures from the Department of Labor, published on Friday, notably signaled a slowdown in job creation in the United States, a dynamic which was accompanied by a rise in the unemployment rate and a easing of wage pressures which militate in favor of lower inflation.

As a result, the Dow Jones gained 1.6% on the New York Stock Exchange last week, while the Nasdaq garnered 3.3% weekly gains.

Investors seem to have managed to overcome the ‘wall of worry’ of the moment by overcoming their fears about several major negative issues, such as the slowdown in growth, the persistence of inflation or the evolution of monetary policies.

However, these good performances are likely to be followed by more volatile movements, with the history of Wall Street prompting some caution for the coming weeks.

According to the Stock Trader’s Almanac, September is traditionally the worst month of the year for US equities, with an average decline of 0.8% for the S&P 500 since 1950.

In Paris, the CAC 40 index has just failed many times against its major resistance of 7360 points, a technical pivot which could nevertheless open the way to a return to its annual highs in April.

“The deceleration in the US labor market, however, could be a key catalyst for higher equities and lower bond yields by the end of the year,” said Mona Mahajan, strategist at Edward Jones.

“It would indeed mean that the Fed could finally stand aside by pausing on rates”, continues the analyst.

For the time being, investors should lack direction, especially since the week will be light in terms of indicators.

The figures for industrial orders in the United States tomorrow, then the ISM for services on Wednesday, will however be followed by investors in search of concrete elements on the health of the economy.

The mid-week publication of industrial orders and then industrial production in Germany should confirm that Europe’s largest economy, the continent’s traditional engine, is showing worrying signs of weakness.

In the immediate future, the closure of Wall Street should be synonymous with a lack of guidance and activity should remain reduced in all European markets.

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