End of Krach for the CAC? The evolution of the Paris Stock Exchange price since the beginning of the year has not deceived: the hollow of the wave has passed. By opening this morning around 7,800 points, the CAC 40 found its level of April 1, on the eve of Donald Trump’s announcements on the recovery of customs duties. In one week, the Parisian index had then sold 12.87%. A hole he therefore filled in just a month and a half.
Nothing to do with the last major stock market crisis, following the announcement of the first confinement, in March 2020. The CAC 40 then took a year to recover, but the fall had been more brutal (near -30% in two weeks). “We could sincerely fear a replica of 2020, with a violent krach, but even if the panic was very strong, the episode was therefore less serious”confirms Antoine Andreani, research manager at XTB France.
Actions remain the most efficient placement over the long term
A return to the logic peaks, since the customs prices, at the origin of this zone of turbulence, seem of ancient history: “With the first agreements signed between the United States and the United Kingdom, then China, one has the impression of erasing this crisis, and returning to this very long bullish cycle at work since March 2009”, Note Antoine Andreani. For this financial market specialist, “The scholarship inspires and expires naturally, and each time it will decrease, institutional (major asset managers, banks and insurers, editor’s note) will reinvest massively.” Which mechanically sets off on the upward courses.
Thus, it is the actions that remain statistically the most efficient placement over the long term. Since 2009, according to the latest study by the Institute of Real Estate and Land Savings (IEIF) on the subject, shares – all major stock market indices – have displayed a yield of 7.8% per year on averageabsorbing several moments of violent hollow: crisis of sovereign debts, Brexit, Covid crisis, war in Ukraine, post-Cavid inflation …
But now that the hardest part is behind him, can the CAC 40 continue to progress until the end of the year? Maybe, but “Not necessarily in a straight line”according to Antoine Andreani. Indeed, the Parisian rating is not sheltered from a new peak of volatility, for example at the end of the 90 days of commercial truce between the United States and China, if a more sustainable agreement is not found. What’s more, after China, “Relationships can also tend with the European Union”, Recalls Antoine Andreani. Finally, CAC 40 movements will also remain dictated by the American Stock Exchange (S&P 500, Dow Jones), which still hopes for a drop in guiding rates from the Federal Reserve (Fed). Decrease which is still long in coming, due to a lack of notable progress on inflation across the Atlantic.
