The Paris Bourse is likely to try to get back on track at the opening bell on Monday, while growing fears of a US recession have recently put the brakes on risky assets.

At around 8.15am, the 'future' contract on the CAC 40 index - for delivery at the end of August - was up 25 points at 7,299.5 points, heralding a start to the session in positive territory.

Despite the blow that shook the stock markets at the beginning of last week, the Paris market managed to save the day, posting a symbolic weekly gain of 0.2%.

Since the end of July, however, the CAC 40 has broken through the 7,500, 7,400 and 7,300 point thresholds in turn, and is now trading below the 7,275 point level, a support considered to be important.

Its decline since the start of the year has now reached almost 4%.

"This week has seen the markets go on a rollercoaster ride, mixing the express liquidation of positions and the growing risk of recession", Florian Ielpo, Head of Macroeconomic Research at Lombard Odier Investment Managers, pointed out on Friday.

According to the strategists, the slowdown in US growth has become an obvious factor for investors to take into account, given the employment statistics published over the past few weeks.

After an idyllic first half of the year for the markets, managers and analysts are now turning their anxious eyes towards a second half that could hold more turbulence in store.

Signs of nervousness are multiplying on Wall Street, where last week the Dow Jones interrupted a series of four consecutive weeks of gains by retreating by more than 2%.

The Nasdaq Composite has officially entered correction territory, falling by more than 10% since its recent high on July 10.

The main question for market participants will now be to determine whether the US economy is heading for a soft landing, or a possible slide back into recession.

With this in mind, investors will be keeping a close eye on the state of consumer spending, and in particular on US retail sales, due on Thursday, in order to reassure themselves about the economic situation.

US inflation figures, due on Wednesday, will also be watched with great interest.

While the second-quarter corporate earnings 'season' is now drawing to a close, Walmart's accounts - due on Thursday - will provide an insight into US consumer morale.

Above all, market participants are hoping that the recent episode of volatility will normalize, thanks to the anticipated dip in activity with the August vacations.

'It's not unusual for financial markets to experience a correction during the summer', point out the teams at Janus Henderson.

'With leverage and less liquid markets (in the summer period), a trend reversal (weak yen to strong yen) inevitably creates margin calls', they explain.

Those who are forced to sell their risk exposure are liquidating their positions, which explains the speed of the stock market correction', the managers add.

The VIX index of volatility on S&P 500 options, often referred to as the 'fear index', has temporarily reached a level not seen since early 2020 and the coronavirus crisis.

Although current volatility may be painful, a recovery from a period of excessive optimism could pave the way for a healthier market for the remainder of 2024", says Janus Henderson.

In a sign that economic growth is now being viewed with more concern, traders are now anticipating a 50 basis point cut in Fed rates in September, with a probability of almost 50%.

"All this is probably premature, but it does suggest a certain caution in portfolio positioning", warns Florian Ielpo, Head of Macroeconomic Research at LOIM.

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