Aided by Wall Street, the Paris Bourse gave itself some breathing space in relation to the critical '7,000' threshold.

The CAC40 index gave itself a safety margin of +0.6% at 4,045Pts... but in volumes so insignificant (1.2 billion euros in 8 hours of trading) that it would be premature to invoke a wave of cheap buybacks.

The Euro-Stoxx50 also posted +0.6% at 4,160 with the support of US indices which collectively posted rises of +1% (Dow Jones) to +1.2% (Nasdaq), with the Russell-2000 settling for +0.8%.

After Friday's hors d'oeuvre from the US banks - whose rather positive publications did not really reveal any underlying trends - the earnings season will get into full swing over the next few days, monopolizing investors' attention.

Those who are playing the stock market on the upside are hoping that better-than-expected earnings will revive indices that have been losing speed since the start of the summer.

These releases will be of interest in determining the impact on corporate performance of slowing consumer spending, rising interest rates and a strong dollar.

In all, results from 55 S&P 500 companies are expected this week, including those of five Dow Jones constituents, including Goldman Sachs, J&J and American Express.

In the technology sector, investors will be particularly attentive to the results of Tesla and Netflix, expected on Wednesday evening.

Overall, earnings from S&P companies are expected to rebound by 0.4% in the third quarter, according to data compiled by FactSet.

This would be the first quarter of earnings growth after three consecutive earnings contractions.

This earnings season comes at a time when the world's stock markets have weathered last week's intensification of the Israeli-Palestinian conflict rather well.

Holding steady in the 7,000-point zone, the CAC40 posted an unchanged weekly performance. On Wall Street, the Dow Jones gained 0.8% over the past week, while the Nasdaq fell by just 0.2%.

Many strategists point out that tensions in the Middle East have, historically speaking, had only a limited impact on world stock markets.

In fact, during the last 11 major conflicts in the region, the S&P 500 gained an average of around 15% in the 12 months following the outbreak of tensions," points out Larry Adam, Chief Investment Officer at Raymond James.

Encouragingly, Israel decided over the weekend to restore water supplies to the southern Gaza Strip, and there are rumors that US President Joe Biden will soon be visiting the region.

The CBOE Volatility Index, a barometer of investor anxiety, has nevertheless rebounded by 55% over the past month, and is now flirting with the fateful 20-point mark... but it fell back slightly on Monday, by -4.6% to 18.40 (which takes it away from the critical 20/20.30 zone).

Apart from corporate results, the week ahead will also be rich in statistics.

Tuesday will see the publication of the ZEW index of German investor sentiment, followed by US retail sales, before Eurozone consumer prices the next day.

US housing starts and building permits will also be on the agenda on Wednesday, and the list will continue on Thursday with jobless claims, Conference Board leading indicators and US existing home sales.

On the bond front, the recent easing of long-term yields is helping to calm sellers, even if the fall in yields does not really reflect a shift to risk-off, which would be understandable in view of the risk of conflagration in the Middle East.
The week opens on a consolidation of the bond markets, with yields up 4pts on our OATs to 3.402% and on Bunds (up 4.7pts to 2.78%).
US T-Bonds show +7Pts to 4.700%, erasing Friday's gains.

On the energy market, 'Brent' oil consolidates (-0.7% to $90.1) after last week's sharp 6% rise at the end of a weekend marked by a lack of escalation in the Middle East... but which only seems to be a respite.



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