CAC 40: A new variant of the coronavirus causes a shock wave in the markets

(News Bulletin 247) – In the absence of benchmarks from Wall Street, which remained closed due to the Thanksgiving holidays, the Parisian market has nibbled a few points: in meager volumes, the CAC 40, mainly driven by luxury and the technology, rose 0.48% to 7,075 points. The press conference by Olivier Veran, Minister of Health, did not in itself constitute a burden for the markets, in the sense that, in the immediate future and in the current state of affairs, the hypothesis of a new confinement is ruled out. But the discovery of a new “variant” of the coronavirus has frozen the blood of the financial community in Asian exchanges. Tokyo lost more than 2.50% at the close on Friday. The CAC, the DAX and all European indices are expected to drop sharply at the opening.

On the monetary policy side yesterday, the minutes of the last ECB meeting showed that the Frankfurt Institution did not expect to have enough data as of December to take a final position on the evolution of the inflation. The institution therefore intends to retain room for maneuver beyond this deadline. On the Fed’s side, several officials are prepared to consider an accelerated tightening of market support measures as well as a faster hike in interest rates if high prices persist, according to the minutes (” minutes “in English) of the November meeting, released Wednesday evening.

Unlike the day before, Thursday’s statistical program was much leaner. Note all the same the slight downward revision of German GDP in Q3, to + 1.7% from one quarter to the next.

On the value side, we should point out the increases in so-called growth stocks, such as Hermès (+ 1.69% to 1,656.50 euros), Dassault Systèmes (+ 1.92% to 53.11 euros), or Worldline (+2 , 45% to 213.0 euros). As soon as they open, we will particularly follow files related to tourism, aviation, airport services, aircraft construction, such as Accor, Air France, ADP, Airbus or Safran.

Remember that across the Atlantic, Wall Street remained closed Thursday (Thanksgiving). The place will only open this Friday for a truncated session, in the absence of a very large fringe of operators.

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 1,1230$. One barrel of WTI, one of the barometers of risk appetite in financial markets, was trading around 75,60$.

To be continued on the agenda this Friday, as a priority the M3 money supply in the Euro Zone at 10:00 am.

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. At this stage, the formation of a very large bearish gap is envisaged. One of the questions to be clarified is the attitude of prices this Friday in the face of the bullish gap of November 1st.

PREVISION

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 quotes below the resistance at 7185.00 points.

Hourly data graph

Daily data graph

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