The Paris Bourse started the session in the green on Monday morning, but investors opted for caution ahead of this week's ramp-up of the quarterly corporate earnings season. The CAC 40 index clawed back almost 0.5% towards 8055 points.

For almost a month now, the world's stock markets have been treading water, or even consolidating sluggishly, as inflation reawakens in the USA and Fed officials make increasingly cautious statements.

Faced with doubts surrounding the timetable for a first rate cut on the other side of the Atlantic, and an economic recovery that is still struggling to materialize in Europe, the equity markets are following a bumpier path.

In Paris, the CAC 40 index - which was still flirting with the major resistance level of 8250 points at the end of March - has lost 2.4% in less than two weeks, and is now trading not far from its important support level of 8000 points.

On Wall Street, the three major indices have just posted two consecutive weeks of decline, after having previously enjoyed nine straight weeks of gains.

These uncertainties have pushed gold to new record highs, as traders worry not only about re-accelerating inflation in the US, but also about current geopolitical tensions and rising public debt.

At the same time, volatility as measured by the CBOE's VIX index - often referred to as the fear index - has rebounded to levels not seen since last autumn and the Hamas attacks on Israel.

On the bond market, Wall Street's pause did not encourage a return to Treasuries, with the yield on the US ten-year climbing to 2.50%, a new annual high.

With the earnings season set to get into full swing from this week onwards, investors will be able to test market fundamentals through the accounts of listed companies.

FactSet's earnings data for US groups now predict only a 0.9% rise in first-quarter profits, compared with 3.4% at the end of March.

Some 44 companies belonging to the S&P 500 index, including six Dow Jones stocks, will publish their accounts this week.

While JPMorgan's performance was disappointing last Friday, Goldman Sachs' accounts - due mid-day - followed by those of Bank of America and Morgan Stanley (tomorrow) will be particularly closely watched by the markets.

Announcements from Johnson & Johnson, Netflix and Procter & Gamble will also be closely watched in the coming days.

In Europe, the week will be dominated on Wednesday by the results of ASML, one of the driving forces behind the recent rise in European markets, followed by those of Nokia.

According to analysts, positive earnings releases - and not just from the technology sector - would help the stock market rally by boosting optimism in equities.

As for economic indicators, in the USA, retail sales figures are due today, while industrial production figures are due tomorrow.

In Europe, seasonally-adjusted industrial production rose by 0.8% in the eurozone and 0.7% in the EU in February compared with the previous month, according to Eurostat estimates, following falls of 3% and 2.7% respectively in January.

Investors' eyes will also be on Beijing, where Chinese gross domestic product (GDP) figures will be published tomorrow, providing valuable clues as to the recovery of the world's second-largest economy.

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