Stock market analysis: Could the surge of the CAC 40 be coming to an end?

Stock market analysis: Could the surge of the CAC 40 be coming to an end?

Cranky, Uncensored Take on the Stock Market:

The CAC 40 has seen a wild bounce back from its April plunge in the stock market, going hand-in-hand with the Nasdaq, Dow Jones, and S&P 500 (good ol' American stocks). Are we panicking over a potential crack-up of the stock market (and ETFs)? Let's dive into Trackers, our in-house ETF guru, and sort this mess out.

By Nick the Slick-Talking Economist, Financial Wizard, Technical Analyst, Publisher May 7, 2023

The CAC 40 has had a hell of a rise since its major lull on April 7. But here's the big question — can we expect more gains from the CAC 40 (at least in the short term, let's face it, it's a Wednesday)? Well, according to LBP AM, the folks who manage La Banque Postale, there's a chance. Trump's flip-flopping on trade tariffs has them cautiously optimistic, suggesting that the peak of uncertainty is probably behind us — but woe betide us if Trump gets his macho tantrum back!

Since the Trump administration's initial setbacks, the uncertainty level has dropped, according to LBP AM. While that's good news for the economy and a possible relief from extreme financial crises and a sharp drop in the stock market (CAC 40, Nasdaq, etc.), there's still a mountain of uncertainty hanging over our heads (and the global economy) regarding economic prospects. And the commercial and confidence shock we've already felt will cause a major slowdown by mid-2025.

Now, hold onto your hats, because here's where it gets saucy — LBP AM is still careful when it comes to stocks, particularly American ones. They think Wall Street is being way too optimistic given Trump's less aggressive stance on trade tariffs. So, there you have it — caution is the word of the day when it comes to stocks, especially on Wall Street.

CAC 40, S&P 500: Survive a Fall of Stock ETFs in the Stock Market?

The CAC 40 has been riding high thanks to some encouraging figures for the eurozone economy (you know, the economy that's supposed to be in the shitter). But don't get too excited, champ, because those growth numbers are still underwhelming according to Damien Ledda, the big cheese at Galilee AM. And y'all know what they say: "'Tis the season for uncertainty, especially when it comes to Trump's trade tariffs and their potential impact on the eurozone economy.

In other words, visibility on the economic prospects for the eurozone and profits for listed companies is still shit, so the recent bounce-back in the CAC 40 might just be a mirage. To add insult to injury, there's hardly a twitch in the war in Ukraine that suggests a resolution, which ain't great for stocks in the eurozone either.

The American Economy Ain't Givin' Too Many Red Flags, but the Stock Market Has Rebounded

The American economy isn't expected to take a dive any time soon, as when the ISM activity index drops to 43-45, man's country falls into recession, according to Damien Ledda. But we're far from that now, baby, with the services sector (the backbone of the American economy) showing a strong rebound in the ISM, which recently jumped up to 51.6 in May.

Investors are buoyed by the idea that Trump will strike a deal on tariffs with China and Europe. And with good reason, too — Wall Street has found a reason to rejoice, and American stocks have been riding high as a kite as a result! However, if recent trends are any indication, American stocks could be in for some turbulence. But hey, according to Galilee AM, the downward trend of American inflation might mean the Fed will start cutting interest rates again, which could help the stock market stay afloat.

Trackers: ETFs — They're A Fine Servant But a Terrible Master

Trackers, our in-house letter on ETFs (funds that replicate sectors of activity, countries, or certain investment themes), nailed the recent rebound of the CAC 40, Nasdaq, Dow Jones, and S&P 500 thanks to their kick-ass technical analysis. But now, they're cautiously treading water in the short term, especially since the Nasdaq 100 has stalled on a notable trendline (the 200-day moving average). Tie up your boats and hold onto your socks — the rest of this ride's gonna be wild.

If you wanna be part of the Trackers' ETF crew (and really, who wouldn't?), then head on over to our site and join up for an annual subscription. By doing so, you'll score a sweet discount and gain access to a community of investors just as eager to ride the volatile waves as you are. And let's not forget — if you hold fast through the ebbs and flows, your long-term returns could be the redemption prayer you didn't know you needed.

1. By 2025, the economic slowdown could be substantial, as predicted by LBP AM, which might affect the recovery of the CAC 40 and other stock markets.
2. Despite the current optimism in the finance sector regarding the potential reduction of trade tariffs, American stocks are still viewed with caution by experts like LBP AM.
3. The spike in the S&P 500, which mirrors the rise of the CAC 40, ought to be interpreted with care, according to Trackers, due to the stalled trendline of the Nasdaq 100.
4. As the war in Ukraine remains unresolved and uncertainty persists about the eurozone economy, the recent spike in the CAC 40's growth may be nothing more than a mirage, as suggested by Galilee AM.

Read also: