Rebound in CAC 40: How long will it put to erase the Krach?

After a historic fall, the CAC 40 tries to bounce back in the wake of American scholarships. But how long will it take for the Paris index to regain its level before Krach?

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After the fall, the rebound. Yesterday, Wednesday, April 9, the announcement by Donald Trump of a temporary suspension of his brand new customs duties flew off the American stock market clues (+12.6% For the Nasdaq, +9.5% for the S&P 500 at the fence). A spectacular reversal that also swept the CAC 40 this Thursday, April 10. After giving in 12.87% in a week – since the announcement of customs prices on April 2 – he returned today 3.83% at the fence.

Also, the losses recorded on this bloody week are far from having been erased by the day’s meeting. But is there a hope that the Parisian index quickly regains its level before Krach, following this new turnaround by Donald Trump? “Admittedly, the worst scenario of a total trade war is avoided for the moment, but the disturbances are there to last. Even if customs duties were permanently suspended, damage has been inflicted on the economy through a lasting feeling of unpredictability of policies “Note Alexandre Hezez, strategist of the Banque Richelieu group, in its macro point and markets of April 10.

Following the 2011 crisis, the CAC 40 takes two years to regain its level

In this climate of uncertainty, it is difficult to project yourself on the time necessary to return to the Zenith of 8,000 points (the CAC 40 closes today at 7,148 points), but a detour by the previous crises can give us an indication. For Alexandre Hezez, “We must distinguish the peaks of volatility, which can last a few days or weeks, following which we return to the top quickly, and conversely the major financial crises, which can last much more time”.

In this second category, we find in particular the krach following the announcement of the first confinement in France: on March 12, 2020, the CAC 40 fall in 12.28%the strongest daily decrease in its history (as a comparison, the most downward session of the past week has recorded a “only” decline of 4.78%). To find its level in early 2020 (6,000 points), the CAC 40 had put everything right a year, passing this course again on March 11, 2021. Ten years earlier, during the summer of 2011, another stock market storm occurred, that of the sovereign debt crisis: between July 1 and September 22, the Parisian index loses 30%. It will take a little less than two years to regain its level of 4,000 points in May 2013.

The rebound will continue to depend on the American scholarship

In the event of a major crisis, the ascent can therefore be much longer than the descent, but what catalysts could help the CAC 40 to get back into the saddle faster? According to Antoine Andreani, head of research at XTB France, it is, just like for the rebound of the day, on the side of the American clues that we will have to watch for the signs of a revival of the CAC 40: “We will need good news on the other side of the Atlantic. The CAC is not going to have too much personality during this period, it will be attracted as a magnet by what the S&P 500 dictates. ”

A correlation between the big indices completely logical for Sandy Campart, teacher researcher at the University of Caen: “The equity markets are governed by global economic prospects. If the market is lower, it is for everyone, and conversely, when the perspectives are again optimistic, all the clues are straightening up.»» However, there are, according to the researcher, “Sectoral differences” who can help them leave more or less quickly. In CAC 40, it is the luxury that weighs the most in terms of market capitalization. It is therefore the prospects of this sector in the face of the new deal dictated by customs duties that you will have to look closely to assess the capacity of the Paris Stock Exchange to quickly find its highest.