(News Bulletin 247) – The CAC 40 has reached in extremis to preserve the psychological threshold of 6,000 points, after a stormy session on Wednesday, a session marked by the publication of an acceleration in inflation across the Atlantic. Note that this Thursday, July 14 (holiday, National Day), the Paris Stock Exchange will be open, under the usual conditions of hours and listing. Discrete volumes are however to be expected in the envisaged absence of a large fringe of operators.
In detail, prices gained monthly (month on month) 1.3% in June, against 1.0% in May. Excluding food and energy (volatile elements), prices increased by 0.7% in June, against +0.6% in May. Over the past 12 months, prices, in their broadest sense, have jumped 9.1%. What drastically reduce the probabilities of an increase in Fed Funds by 50 bps at the end of the month, in favor of the probabilities of a new tightening of 75 bps.
Between high inflation, a looming recession and the Russian invasion of Ukraine, stock and bond markets suffered particularly badly during the first half of 2022. “We don’t expect a turnaround in the short term, as long as it’s unclear when the cycle of inflation and rising rates will end,” said Stefan Kreuzkamp, ​​chief investment officer at DWS. “Growth should remain under pressure. This will have repercussions on the evolution of corporate earnings,” he said, while DWS is revising its targets for the main stock market indices by 5 to 10% downwards.
On the securities side, banking and the automobile amplified market variations, like representatives such as BNP-Paribas (-2.48% to 42.73 euros), or Faurecia (-3.92% to 16, 28 euro). In addition, EDF has asked for its trading to be suspended, pending the publication by the State of a press release (by July 19 at the latest), while the government has announced that it wants to regain control of 100% of the capital. of the group (against 84% currently).
On the other side of the Atlantic, the main equity indices ended the session in the red following the inflation figures. Fears of an onset of recession, itself reinforced by the inflationary context, are taking shape in an economy marked by full employment and pressure on wages. The Dow Jones fell 0.67% to 30,772 points and the Nasdaq Composite fell 0.15% to 11,247 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, lost 0.45% to 3,801 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 $1.0020. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $96.20.
To follow as a priority on the statistical agenda this Thursday, the producer price index in the United States at 2:30 p.m.
KEY GRAPHIC ELEMENTS
The painting (its backdrop in any case) is dark.
The sell signals have multiplied since the combination of “evening star” candles (May 27, 30 and 31). The openings successively in bearish gap of the last two sessions of week 23, then of the first session of week 24, were accompanied by a continuous mobilization of the selling side during the session and closing on the low points of the session. All in sharply rising volumes. The momentum of participation will have followed that of the clearings, even as the CAC will have re-entered the lower part at a bearish slant that retains its resistance attributes.
The technical rebound that began during the week (W25) remains anecdotal at this stage in view of the transaction volumes accompanying it and in view of the initial losses. It came to an early halt, and the resumption of selling pressures, on gaps, on breach of the symbolic threshold (6,000 points), and in high volumes, augurs a continuation of clearances.
Tuesday, July 05, the traced candle combines worrying characteristics, its structure with an elongated body without a wick, materializing a mobilization of the selling camp throughout the session, all in relatively heavy volumes, and on breaking the technical threshold.
The flagship index achieved a pullback (graphic rejection) of school on the 6,000 points.
Neutral opinion across the upcoming session.
FORECAST
In view of 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 a crossing of 6068.00 points would revive the tension in the purchase. While a break of 5785.00 points would relaunch the selling pressure.
Hourly data chart
Chart in daily data
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