Will the CAC40 soon reach 5,600?

After hovering around 5,600 points at the end of April, the CAC40 fell sharply to about 5,150 points at the end of May, before rising slightly above 5,600 points in July. Since then, the French index’s prices have dropped sharply, down to 5,225 points. In a time of tense geopolitics, investors and analysts have doubts about whether the leading French index will be able to bounce back in the short to medium term.

Although “only” 7% separates the CAC40 from the 5,600 point level, investors wonder if the index will be able to reach this level by summer. This issue is one of the biggest challenges in trading. When figuring out how you can invest in stocks, you need to understand the challenges involved in predicting market trends. Once you do and you start trading, you’ll be rewarded with more winning trades.

Many economic and geopolitical challenges weigh on global growth prospects…

One of the biggest concerns for investors is the deterioration in global growth prospects. The IMF, or International Monetary Fund, has recently reduced its forecasts of global economic growth due to trade tensions and concerns about China’s growth. In their July outlook update, the IMF revised downward their projection for global growth to 3.2% in 2019 and 3.5% in 2020.

“There are growing concerns over the impact of current trade tensions. The risk is that the most recent US-China tariffs could further reduce investment, productivity and growth” says Christine Lagarde.

According to the IMF’s estimates, tariffs between the United States and China could reduce global production by 0.5% by 2020. The loss of gross domestic product resulting from the taxes applied from both countries could be higher than the value of the South African economy, which is about $455 billion.

…and which affects investors’ perceptions of the evolution of European economies such as France

According to the President of the European Central Bank, Mario Draghi, “developments in the countries of the euro zone are not independent of the pace of global growth”. In its latest Economic Bulletin, the ECB declared that “incoming information since the last Governing Council meeting in early June indicates that, while further employment gains and increasing wages continue to underpin the resilience of the economy, softening global growth dynamics and weak international trade are still weighing on the euro area outlook”.

“Moreover, the prolonged presence of uncertainties, related to geopolitical factors, the rising threat of protectionism and vulnerabilities in emerging markets, is dampening economic sentiment, notably in the manufacturing sector”.

It is also important to take into account the risks weighing on the euro area countries, accentuating systematic risk.

The IMF has issued recent warnings about a potential new crisis in the euro zone. According to Paul Thomsen – Director of the IMF’s European Department, “the risks to euro area stability arising from national shocks – risks that have been so violently illustrated by the euro area crisis – remain very serious”.

Some countries from the euro area show low growth with high structural unemployment, such as Italy and Greece. These countries have failed to implement the necessary reforms. They continue to go into debt instead of reducing debt levels, which carries many risks.

Let’s not forget to consider the uncertainties surrounding Brexit. Leaving the United Kingdom without an agreement could be expensive for both sides of the Channel. The IMF has estimated that a Brexit without an agreement would cost the European Union 1.5% growth.

January 2, 2021 Update: We have just announced our BEST STOCK NEWSLETTER of 2020 AWARD!

CLICK HERE to find out which stock newsletter was up 78% in 2020 (and whose 2019 picks are now up 113%).

*** Our Award for BEST STOCK NEWSLETTER of 2020 ALERT ***

Updated January 2, 2021

At WallStreetSurvivor, we subscribe to dozens stock recommendation and advisory newsletters. There is ONE newsletter that is constantly outperforming all of the others--The Motley Fool Stock Advisor.

Five of their 2020 stock picks have doubled and the average return of all 24 of their stock picks for 2020 is up 78%!

We have been tracking ALL of the Motley Fool stock picks since January 2016. That's 5 years and 120 stock picks. As of Friday, January 1, 2021 the Motley Fool's January stock pick (TSLA) is up 720%, their March pick (ZM) is up 172%, their April pick of SHOP is up 226% and their June pick CRWD is up 120%; and another two have more than doubled. In addition, 10 of their 2019, 12 of their 2018, 11 of their 2017, 15 of their 2016. Most impressively, over the last 5 years that we have been tracking every recommendation, their average stock pick is up 209%--tht means over the last 5 years their stock picks, on average, have TRIPLED!

Now no one can guarantee that their next picks will be as strong, but our 5 years of experience has been super-profitable. The important thing about the Fool stock picks is you have to buy them the day they are recommended because they usually pop 5-10% in the first 72 hours after the release their recommendation. You sure don’t want to risk missing out on their next pick.

Normally the Fool service is priced at $199 per year but they are currently offering a NEW SUBSCRIBER DISCOUNT that allows you to get theiir next 24 stock picks for just $99/year. HERE is the LINK to visit their New Subscriber Discount page.

CLICK HERE to get access to all The Motley Fool’s Stock Picks and their next 12 months of picks for just $99 per Year! 



GET UP TO $1,000 IN FREE STOCK

WHEN YOU OPEN A ROBINHOOD BROKERAGE ACCOUNT

Robinhood was the first brokerage site to NOT charge commissions when they opened in 2013. They just past 10,000,000 accounts and to celebrate they are offering up to $1,000 in free stock when you open a new account.

Here’s the details: You must click on a special promo link to open your new Robinhood account. Then when you fund your account with at least $10, you will receive one stock valued between $5 and $500. Then, you will get a link to share with your friends. Every time one of your friends opens an account, you will receive another free stock valued between $5 and $500. Click here to learn more about this Special Robinhood offer.

Claim your free stock NOW (before it’s too late)



Comments are closed.