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Stock Selection within CAC 40 Outperforms This Week Amidst General Market Pause; Timely Purchased Assets Scores Big, Gaining Significantly and Swiftly Over Last Few Weeks.

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Stock Market Shift: While the CAC 40 paused this week, the momentum-driven stock selection...
Stock Market Shift: While the CAC 40 paused this week, the momentum-driven stock selection delivered robust returns. Various investments made at favorable moments have recently yielded significant and swift profits.

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Title: CAC 40's Momentum Stocks: A Beacon in Trade War Uncertainty

(Image credit: Fred De Noyelle/GODONG/GETTY IMAGES) By Nick Gallagher, Financial Analyst and Economic JournalistPublished on

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This week, the Paris Stock Exchange, represented by the CAC 40, seemed to catch its breath after a record-breaking surge last week. Nevertheless, the "Momentum" stocks on the exchange continued to shine, with several stocks bought at the right time raking in substantial and swift gains.

On a recent note, J. Safra Sarasin Bank expressed concerns about the CAC 40's skyrocketing performance, stating it could be overly optimistic, considering the impending negative effects of the ongoing trade war that bleeds into consumer prices, pressures on corporate margins, and potential job slowdowns are yet to surface. The bank warns that despite President Trump's claims of trade war benefits for the U.S., the conflict isn't close to resolution. With market instability brewing this spring and summer, it's a cautionary call for investors.

Section 1: The U.S.-China Trade War: A Long and Costly Maze

Although the U.K. and the U.S. have successfully negotiated a trade agreement, China remains a stumbling block in the global trade scene. Trump's tariffs on Chinese goods have led to a substantial rise in prices, causing problematic shortages in the U.S. if the country were to sever ties with its largest trading partner. As it stands, all U.S.-China trade is subject to crippling tariffs of over 100%. Oddo BHF Financial Institution comments that this situation can't be sustained for either country in the long run.

It's worth noting that China has the capability to endure the financial strain of the trade war for an extended period. But, if economic conditions worsen, it might push the Middle Kingdom into a recession, impacting the performance of "super stocks" in the CAC 40.

Section 2: Momentum Stocks: Navigating Turbulent Waters

While the CAC 40 stagnated this week, stocks within the Momentum portfolio, our expert team's recommended investments, outperformed—such as STMicroelectronics (+3%) and Bitcoin (+7%). Our team has been prudent in their investment recommendations, successfully alerting readers to the CAC 40's plunge earlier this year and advising purchases during a critical period between April 7 and 9. The savvy timing has resulted in substantial returns.

This week, we've also weighed in on the prospects of Airbus, Thales, STMicroelectronics, Sanofi, Veolia, Orange, EssilorLuxottica, Edenred, Air Liquide, and Capgemini within the CAC 40. Additionally, American stocks fans can count on our updated scenario for the S&P 500 and Meta Platforms (Facebook) stock. By subscribing to our daily analysis, expect to stay ahead of the curve.

Section 3: Trade War Factors Affecting CAC 40's "Super Stocks"

Key factors play a significant role in shaping the performance of "super stocks" within the CAC 40 during an extended trade war between China and the U.S.

  1. Trade Tensions:
  2. Global trade uncertainty can lead to market volatility, affecting investor confidence.
  3. Tariffs and retaliation can raise costs for companies reliant on international trade, potentially denting their profitability.
  4. Sector-Specific Effects:
  5. Companies in the automotive and technology sectors, such as Renault and Stellantis and STMicroelectronics, can encounter challenges with supply chains and component sourcing.
  6. Consumer goods and oil & gas sectors may face fluctuations due to changing consumer demand and energy prices.
  7. Currency Fluctuations:
  8. Changes in currency exchange rates, impacting companies with significant exports or imports, can influence the competitiveness of companies in the CAC 40.
  9. Investor Sentiment and Market Trends:
  10. Investors may shift toward safe-haven assets, affecting stock prices of companies perceived as risky or volatile.
  11. The formation of bearish technical patterns can signal further declines in stock prices.
  12. Company-Specific Factors:
  13. Diversification and adaptability can help companies thrive during trade wars.
  14. Shrewd leadership and strategic decisions, such as investments in new markets or technologies, can boost a company's resilience and growth potential.

While "super stocks" in the CAC 40 may demonstrate resilience due to strong fundamentals, they're not invincible against the broader economic and geopolitical factors that can affect their performance during trade wars.

Investors should keep a close eye on the stock-market performance of the CAC 40's momentum stocks, as they continue to exhibit strong growth despite market instability caused by the trade war. However, the ongoing trade war between China and the U.S. could potentially impact the financial health of these so-called "super stocks," particularly those in sectors like automotive, technology, consumer goods, and oil & gas, given the influence of tariffs, supply chain challenges, and currency fluctuations. Thus, it's crucial for investors to assess each stock's label of resilience and adaptability when navigating this long and costly maze of trade tensions.

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