This summer’s full order books gave heart to investors. Confident that the economy was picking up, market players helped the stock markets to bounce back. They held their ground in September, enabling the major stock exchanges to chalk up excellent results. The Paris index rose to 4000 points, while in Wall Street, the Dow Jones rose above 11,000, reaching annual highs.

There have been several encouraging macroeconomic indicators in the United States, although the recent upturn was helped by measures taken by the Federal Reserve. The trend is also reflected in the German IFO business climate index which rose to 107.6 in October 2010, its highest level in 3 and a half years! The upturn was confirmed by the annual growth rate figures of 3.4%, and the German government can congratulate itself on the fall in unemployment figures. In Europe, industry order books were better than expected (+5.3% with monthly variations) and unemployment was stable at 10.1% for September 2010.
The alleviation of fears of a double dip in the US and global economy helped drive the upturn, with investors less gloomy about the economic future. However, we shouldn’t forget that the positive figures for firms were also boosted by lower costs and so higher margins. Economists are now predicting a slowdown in the next quarter and with slower growth, stock indexes could remain stuck at annual highs. Investors are therefore cautious. This is apparent in the high value of American treasury notes: T-Notes yielded over 126% and the T-Bond was over 132%. The price of gold also reached record highs at 1,388$ an ounce in September. However, for the time being, market momentum remains strong, while the markets continue to be actively supported by central banks.