Traders showed growing caution towards the French economy post-Olympics, likely due to political uncertainty, flat earnings, and luxury sector concerns.
Derivatives trading platform Spectrum Markets’ SERIX data has revealed a bearish shift in sentiment towards the CAC 40. The Spectrum European Retail Investor Index (SERIX) dropped from a neutral 100 in July to a bearish 93 in August.
Spectrum also saw after-hours trading in August 2024 reach 38.7%, its highest level since November 2022, reflecting rising demand for 24/5 trading hours.
Traders turned bearish on CAC 40
The SERIX value indicates retail investor sentiment. A number above 100 marks bullish sentiment, and a number below 100 indicates bearish sentiment. (See below for more information on the methodology).
August witnessed significant market-sensitive events that triggered spikes in volatility. As a result, 38.7% of trading on Spectrum took place outside of traditional European market hours during this period, its highest level of out-of-hours trading on Spectrum since November 2022.
“Our bearish investor sentiment index indicates a degree of pessimism among retail investors, as the attention switched back to politics. After the heightened political uncertainty caused by President Macron’s call for a snap election in June, the upcoming Olympics worked as a distraction to investors’ concerns,” said Michael Hall, Head of Distribution at Spectrum Markets.
Political deadlocks, however, did not vanish. This, combined with headwinds in French corporate earnings, especially in the luxury goods sector, has added to market concerns. “Global demand, especially from China, has been weaker than expected, leading to underperformance from major companies like LVMH and L’Oréal,” Hall concluded.
Spectrum’s August data
In August 2024, order book turnover on Spectrum was €306.3 million. 38.7% of trades took place outside of traditional hours (i.e. between 17:30 and 09:00 CET). The order book turnover was distributed among various underlying assets as follows:
- 82.2% on indices
- 2.8% on currency pairs
- 7.4% on commodities
- 4.5% on equities
- 3.1% on cryptocurrencies
The top three traded underlying markets were NASDAQ 100 (34.3%), DAX 40 (26.6%), and DOW 30 (11.4%).
Looking at the SERIX data for the top three underlying markets, the NASDAQ 100 remained at a neutral 100 from last month, while the DAX 40 dropped from a neutral 100 to a bearish 96, and the DOW 30 increased slightly but remained bearish from 96 to 98 last month.
- CAC 40 showing strong negative trend
- Politics will be key for financial markets this summer
- Macron’s snap election: is this the ‘Truss moment’ for French financial markets?
About SERIX and Spectrum
SERIX uses the trading venue’s pan-European trading data to shed light on investor sentiment towards current development in financial markets. It’s calculated on a monthly basis by analysing retail investor trades placed and subtracting the proportion of bearish trades from the proportion of bullish trades. This gives a single figure (rebased at 100) that indicates the strength and direction of sentiment.
Spectrum Markets is a pan-European trading venue for financial instruments aimed at financial institutions and their retail investors. The company is headquartered in Frankfurt am Main, Germany, with presence across Europe. Spectrum Markets was designed for transparency, integration and openness while enabling unparalleled access to the markets beyond traditional trading hours with 24/5 on-venue trading for the first time in Europe.
Since launch in August 2019, financial instruments listed on Spectrum Markets have been made available for retail trading in Germany, Italy, France, Spain, Sweden, Norway, the Netherlands, Ireland and Finland.
