(News Bulletin 247) – In relatively calm volumes due to the absence of a large fringe of operators for Whit Monday, the CAC 40 gained 0.98% to 6,548 points yesterday, the candle of the day displaying a very significant upper shadow, synonymous with reduced gains during the session.
The problem of powerful and persistent inflation, and its corollary, namely the aggressiveness of the reaction of the major central banks, remain particularly present in the minds of the speakers. As such this week, two important appointments to tick: Thursday’s outcome of the Governing Council of the ECB and the consumer price indices in the United States on Friday.
No major statistical figures were on the agenda yesterday, so traders continued to digest the contents of the latest federal NFP report released on Friday. In detail, this report highlights 390,000 job creations in the private sector, well beyond expectations, but stable monthly wage growth (+0.3% against 0.4% expected), and a stable unemployment rate at 3.6%while many sectors especially in logistics services.
On the values ​​side, down on Friday at the announcement of the terms of its capital increase, Faurecia recovered by 9.76% to 26.10 euros, thus offering itself the head of the SRD, leading other automotive suppliers to the Valeo (+6.99%) or Plastic Omnium (+3.82%) rating. Several analysts like UBS have confirmed their positive opinion on Faurecia. Also favored by a design office, Societe Generale gained 2.64%: for Jefferies, the objective on the title goes from 25 to 35 euros, while the question of exposure to Russia now seems to be integrated.
On the other side of the Atlantic, the main equity indices managed to maintain some meager closing gains, like the Dow Jones (+0.05% to 32,915 points) or the Nasdaq Composite (+ 0.40% at 12,061 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, nibbling 0.31% to 4,121 points.
A point on the other risky asset classes: around 08:00 this morning on the foreign exchange market, the single currency was trading at a level close to $1.0670. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $119.00.
On the agenda this Tuesday, the Sentix index of investor confidence in the Euro Zone at 10.30 a.m. and the American trade balance at 2.30 p.m.
KEY GRAPHIC ELEMENTS
The major test that we mentioned at the end of last week, namely the confrontation of prices with a bearish slant, is still not finished, in the sense that we do not yet have confirmation, either of a pullback, or reinstatement. Once again, today’s session will be instructive in this respect. The combination of “evening star” candles (May 27, 30 and 31), however, invites you to be on your guard. It didn’t stack on Thursday – it was our fear – with a combination of three black soldiers. This suggests a short drift in the immediate future, during which the dynamics of the volumes will be scrutinized. Note that the failure to cross 6,600 points on Monday reinforces this technical level in its role of chart resistance.
FORECAST
In view of the key graphic factors that we have mentioned, our opinion is negative on the CAC 40 index in the short term.
This bearish scenario is valid as long as the CAC 40 index is trading below the resistance at 6600.00 points.
Hourly data chart
Chart in daily data
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