(News Bulletin 247) – The Paris Stock Exchange should continue its decline on Tuesday pending the reopening of Wall Street, closed Monday for the long weekend of ‘Labor Day’, and whose orientation could give direction to the walk.

Around 8:15 am, the ‘future’ contract on the CAC 40 index – delivery at the end of September – fell by 19.5 points to 7269.5 points, announcing a continuation of the decline in recent sessions.

Deprived of the orientation of New York, the Parisian market had slowly drifted into the red zone on Monday on profit taking after its rebound in recent weeks.

The CAC 40 fell 0.2% to 7,279 points after recovering almost 2% since Friday August 18.

While the favorable market momentum slows down a little after this recent rally, the uptrend in equity markets remains intact, according to analysts who are pointing to a return of buyers.

The latest disappointing economic indicators have indeed validated the scenario of a ‘soft landing’ for growth, but also that of a monetary policy that could become more accommodating.

However, market sentiment remains affected by numerous uncertainties, particularly with regard to the transmission of past shocks, starting with the effects of recent interest rate hikes.

“Inflation seems to have been the main source of uncertainty until recently, but eventually economic growth should take over, with the focus now shifting to the delayed impact of past policy rate hikes.” do we at BNP Paribas.

In this sense, the services PMIs expected in Europe in the morning should indeed confirm that economic growth is clearly losing speed on the Old Continent at the start of the third quarter.

The other statistics expected by the end of the week, especially those from German industry, should point in the same direction.

‘This should not prevent the indices from continuing to rise, because despite China’s abortive rebound, the recession in certain countries in the zone, including Germany, or the still very high inflation, the indices are all still close to their all-time highs’, however, assures Vincent Boy, market analyst at IG France.

Wall Street will reopen for its part today after a holiday on Monday and the whole question is whether US equity markets can also continue their rebound.

The rise of more than 17% in the S&P 500 index since the start of the year has so far been due to the surge in its hi-tech components (+44% since January 1), which makes it necessary to appearance of new bullish relays.

‘Investment funds have record exposure to publicly traded tech stocks’, DeftHedge teams point out. ‘It’s never good’, she recalls in a recent note.

For the specialist in foreign exchange risk management and commodity risk management, this configuration could herald a new period of volatility in the financial markets.

For the record, September and October are traditionally weak months for stock markets, with an average decline of 0.8% for the S&P 500 index since 1950 in September alone.

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