CAC 40: The entry into a phase of high volatility has only just begun

(News Bulletin 247) – Not without a certain nervousness, the CAC 40 yesterday continued its consolidation phase, the amplitude of which is not yet fully defined, the markets digesting a salvo of important statistical publications, on the eve of the closing of Wall Street for Thanksgiving. The CAC 40 index ended the session on a stable note (-0.03% to 7,042 points), but in an amplitude of more than 100 points between the low points and the high points of the day. The health situation and the specter of new restrictive measures affect the calmness of the market.

As a reminder, ‘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. M Veran, French Minister of Health, will speak today at a press conference and will announce new measures to fight the epidemic.

In terms of statistics, operators had to compose with an ultra-rich menu on Wednesday, mainly on the American side. Among the most notable in their deviation from consensus are the downward revision of growth for Q3 to + 2.1%, durable goods orders, which completely missed expectations in their broadest calculation base. , and weekly registrations for unemployment benefits, very encouraging on the other hand, below 200,000 new registrations last week. The publication of PCE prices (Personal Consumption Expenditures), the Fed’s preferred measure in its appreciation of inflation, relieved investors, as the indicator did not show a rise above expectations, unlike income dynamics and household spending last month. Finally, the upward revision of the consumer confidence index (U-Mich) will have enabled Wall Street to be supported, which will remain closed, let us recall this Thursday (Thankgiving), and which will reopen for a shorter session than the usual Friday. Resumption in real condition of the debates on Monday.

Note on the European side the publication of a slightly stronger than expected decline in the IFO business climate index in Germany, the leading economic power in the Eurozone. The service component, in particular, “has deteriorated significantly. Skepticism has increased significantly, especially with regard to respondents’ expectations. The last time the expectations indicator fell so sharply, it was was in November 2020. Service providers were also less satisfied with their current situation. The fourth wave of coronavirus has lowered expectations, especially in the tourism and hospitality sectors. “

Side values, Vivendi (+ 1.79% to 11.40 euros) took the top spot in the wake of the interest shown by KKR for Telecom Italia, of which the conglomerate holds a quarter of the capital. At the end of the session, Teleperformance, Vinci and even LVMH accelerated, increasing respectively by 1.2%, 1.13% and 1.1%. In contrast, Schneider Electric (-2.3%) increased its decline, affected by profit taking since a new historic high reached on Monday. ArcelorMittal dropped 2.1%, like Dassault Systèmes. In the end, it is difficult to distinguish a clear sectorial trend (or style of values) in the balance sheet of the day.

On the other side of the Atlantic, the Dow Jones closed Wednesday’s session in equilibrium (-0.03% to 35,804 points), before the truce. The Nasdaq Composite, for its part, managed to grab 0.44% to 15,845 points. The S&P 500, an extended index, benchmark barometer of risk appetite in the eyes of fund managers, nibbled 0.23% to 4,701 points.

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 1,1220$. One barrel of WTI, one of the barometers of risk appetite in financial markets, was trading around 78,20$.

To be kept on the agenda this Thursday, to be followed as a priority by a speech by Christine Lagarde, President of the European Central Bank (ECB) at 2:30 p.m.

Note, for holders of RD positions: The monthly liquidation will take place at the close of the day’s session. This Thursday, November 25 therefore marks the last trading day for SRD orders for the current month.

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

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