Paris Stock Market Rebounds on Hopes of Fed Policy Shift
The week starts on a positive note for the Paris stock market. After a plunge of nearly 3% on Friday, the CAC 40 indeed shows a rebound of 0.76% at the opening. According to analysts, this would be driven by a renewed optimism about the Fed’s policy. A turnaround that raises questions: could the American slowdown ultimately benefit financial markets? Analysis.
In Brief
- The Paris stock market rebounds thanks to expectations of a Fed rate cut.
- Despite declining profits, investors remain confident in light of favorable monetary signals.
The Paris stock market boosted by hopes of rate cuts
Investors now see in the U.S. unemployment report a catalyst for hope. With an increase in the unemployment rate in the United States in July, markets indeed anticipate a possible turning point in the Fed’s monetary policy.
Result: the probability of an interest rate cut in September rose from 38% to over 80% .
For operators, this expected easing is a windfall. Indeed, a rate cut makes stocks more attractive in a context where market volatility has recently strengthened risk aversion.
Disappointing results, but renewed confidence in the stock market
Despite a global economy still under pressure, the results of listed companies are not as bleak as expected. Of the 39 CAC 40 companies, quarterly results show a net profit totaling 51.8 billion euros. This represents a decline of 28%. As for yield, it remains under pressure due to the strong euro and tensions related to U.S. tariffs.
Yet, the stock market already anticipates a lull. Even the French 10-year borrowing rate remains stable at 3.35%. This signals a reassured market. In this context, eyes are now focused on the next Fed meeting in mid-September.
In any case, the stock market could start a bullish cycle if optimism lasts (despite uncertainties over public debt or geopolitics). August therefore promises to be decisive.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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