CAC 40: Very generous statistical menu this Wednesday

(News Bulletin 247) – Fourth session in the red at the close on Tuesday, for the CAC 40, which dropped 0.85% to 7,044 points, after a nervous session, marked by sustained volatility, with the return the specter of new restriction measures to fight against the coronavirus epidemic, and on the eve of a day very rich in major American publications. And this before the Thanksgiving truce.

In the health chapter, Austria applied the general confinement decided last week on Monday morning. The tone is particularly tough in Germany, where the Minister of Health, Jens Spahn, who did not rule out last week to resort to confinement decisions, went much further in the elements of language. He summed up in a chilling phrase the health situation in his country, faced with a resurgence of the epidemic: the Germans will be “vaccinated, cured or dead” by the end of winter because of the current outbreak of infections. to Covid-19 in the country, which no longer excludes compulsory vaccination.

Today, the main events of the week will be concentrated, which the Fed will not fail to analyze with the greatest care: weekly registrations for unemployment benefits, quarterly GDP and PCE, the preferred measure of inflation. The traditional Minutes of the Institution will also be published. And this before Black Friday, the traditional kickoff for end-of-year shopping in the land of consumerism.

Yesterday, operators took note of the very first estimates (flash data) of PMI activity indicators (surveys of purchasing managers). Both services and industry exceeded expectations at 56.6 and 58.6 respectively. Chris Williamson, Chief Business Economist at IHS Markit, comments on the latest figures from the PMI Flash survey: “If, contrary to economists’ expectations, activity growth strengthened in November in the private sector in the area euro, a slowdown in expansion throughout the fourth quarter seems inevitable, particularly given the rise in Covid-19 cases and the risk that this resurgence of the pandemic poses to the economy in December. “

In addition, the reappointment of J. Powell at the head of the Fed, if it was not bad news in itself, brought a little momentary heaviness. Seen as slightly less accommodating than the other presidential candidate Lael Brainard, Jerome Powell assured that the central bank would act so that inflation does not “take root”. For the markets, this news is therefore synonymous with an upcoming tightening of the institution’s monetary policy after 18 months of unfailing support, especially as several officials (Richard Clarida, Christopher Waller, etc.) have been pleading for weeks to reduce the pace of asset buybacks faster than expected.

On the value side, as on the other side of the Atlantic, moreover, technological growth stocks have suffered losses, like in compartment A of the quotation (large caps), of Dassault Systèmes (-3.76% to 53.25 euros ), Solutions 30 (-3.77% to 6.64 euros), Soitec (-3.78% to 224.0 euros), or STMicroelectronics (-3.96% to 43.90 euros). In addition, the action of the specialist in leisure vehicles Trigano dropped 10.48% to 155.50 euros, after a warning on its growth. Find all the details here.

Across the Atlantic, the major equity indices once again ended the session in disarray on Tuesday, with the Dow Jones managing to gain 0.55% to 35,813 points, and the Nasdaq Composite losing 0.50 % at 15,775 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, managed to grab 0.17% to 4,690 points. Remember that Wall Street will remain closed Thursday, and that Friday’s session will be cut in half.

An update on other risky asset classes: around 8 a.m. this morning on the foreign exchange market, the single currency was trading at a level close to 1,1240$. A barrel of WTI, one of the barometers of risk appetite in financial markets, was trading around 78,70$.

To be continued on the statistical agenda on Wednesday, to be followed as a priority for the United States by weekly registrations for unemployment benefits, quarterly GDP and the PCE index, the preferred measure of inflation. Also to be followed, at 10:00 am, the IFO business climate index in Germany, the leading economy in the Euro Zone.

Note, for holders of RD positions: the monthly liquidation will take place at the end of the session on Thursday, November 25.

KEY GRAPHIC ELEMENTS

Friday’s technical event does not threaten the underlying bullish bias at this point. The index is in the process of defining the amplitude of a future legitimate consolidation pattern, whose movements that will compose it may be volatile. Entering a choppy and more technical phase is the preferred scenario at this stage. The short-term challenge will be to identify the form of this consolidation as soon as possible.

PREVISION

With regard to the key graphic factors that we have identified, our opinion is neutral on the CAC 40 index in the short term.

We will take care to note that crossing 7185.00 points would rekindle the purchase tension. While a break of 6960.00 points would revive the selling pressure.

Hourly data graph

Daily data graph

©2021 News Bulletin 247