European Retail Investors Turn Bearish On CAC 40 Amid Post-Olympics Calm And Economic Uncertainty

• Spectrum Markets’ SERIX data reveals a bearish shift in sentiment towards the CAC 40, with the index dropping from a neutral 100 in July to a bearish 93 in August
• Traders show growing caution towards the French economy post-Olympics, likely due to political uncertainty, flat earnings, and luxury sector concerns
• Spectrum saw after-hours trading in August 2024 reach 38.7%, its highest level since November 2022, reflecting rising demand for 24/5 trading hours
  
  

Spectrum Markets (“Spectrum”), the pan-European trading venue designed for retail investors, has published its SERIX sentiment data for European retail investors for August, revealing a bearish sentiment towards the CAC 40, which dropped from a neutral 100 in July to a bearish 93 in August.

The SERIX value indicates retail investor sentiment, with a number above 100 marking bullish sentiment, and a number below 100 indicating 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 hour trading on Spectrum since November 2022.

Market opinion

“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," says 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 concludes.

Spectrum’s August data

In August 2024, order book turnover on Spectrum was €306.3 million, with 38.7% of trades taking place outside of traditional hours (i.e., between 17:30 and 9:00 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 and 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.