The current macroeconomic environment reflects a particular mindset among investors: as the summer season has begun, many are adopting a cautious or even detached stance, but those who remain active in the markets are showing considerable composure. Despite the recent implementation of new tariffs and downward revisions in U.S. job creation figures, the market continues its upward climb, perfectly illustrating the famous Anglo-Saxon adage, “the market climbs a wall of worry.” This phrase characterizes a bull market that advances despite prevailing concerns.
This dynamic is supported by corporate earnings that have generally outperformed expectations, a key driver boosting investor confidence. However, the environment remains very heterogeneous: sectoral disparities and differences between asset classes require rigorous investment selection. It is no longer a matter of indiscriminate buying but rather prioritizing stocks or sectors with solid fundamentals and favorable outlooks.
In the coming days, attention will focus on the release of the U.S. Consumer Price Index (CPI), a crucial indicator for gauging inflation. The consensus expects a moderate increase of 0.1 point to +2.8% year-on-year. More than the number itself, market reactions will be closely watched: the impact on major stock indices (notably the S&P 500), the 10-year U.S. Treasury yield, the dollar, and gold will provide better insight into the current trend and help adjust investment strategies accordingly.
Analyst Recommendation:
Analysts recommend maintaining a balanced and selective approach. Market resilience in the face of headwinds presents an opportunity, but underlying risks should not be overlooked. It is advised to favor:
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Cyclical sectors benefiting from the economic recovery, though with caution regarding valuations.
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Defensive stocks and safe-haven assets, such as gold, to hedge geopolitical and macroeconomic risks.
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Companies with strong balance sheets and the ability to sustain profitability in a volatile environment.
Furthermore, particular attention should be paid to market reactions following the U.S. CPI release, as it will influence expectations around Fed monetary policy, a fundamental driver of current financial markets.