(News Bulletin 247) – Monday’s session ticked all the boxes for low participation: a non-working holiday on the Paris Stock Exchange (August 15, Catholic feast of the Assumption), all in the heart of August, marked by the absence for leave of a large fringe of operators, both individuals and institutions. In the end, starving volumes, which do not confirm the overrun of a zone under surveillance, namely the resistance of 6,550 points.
On the statistical side, after the reassuring feeling caused by the publication of the US consumer confidence index (U-Mich, preliminary data) on Friday, it’s a cold shower on Monday, with a plunge in the Empire State manufacturing index , at -31.3. The following additional information can be read in the statement from the NY Fed: “New orders and shipments plunged, and order books thinned. Delivery times remained stable for the first time in nearly two years and inventories rose slightly Labor market indicators showed a slight increase in employment, but a decline in the average workweek Although still high, the price paid index fell and the price received index remained stable. Looking ahead, businesses do not expect much improvement in economic conditions over the next six months.”
The recent upward extension of equity markets, amplified on 07/19, can be put down to recent reassuring and relatively accommodating remarks from J. Powell, against a background of a slight deceleration in inflation, suggesting that the peak of the price spike would be achieved. “However, an equity market rebound will only be sustainable once this uncertainty [face à la thématique de la hausse des taux d’intérêt] will be passed”, for Sébastien GRASSET (Auris Gestion). “Also, if the Jackson Hole symposium, which will be held from August 25 to 27, will be enlightening, it will be necessary to wait for the FOMC of September 20 and 21 to confirm the attitude, normally even firmer, expected from the FED in its fight against inflation.
On the values ​​side, the most defensive files nevertheless stood out, such as Orange (+0.45% to 10.166 euros), L’Oréal (+0.93% to 363.30 euros), Air Liquide ( +1.15% to 137.36 euros), EssilorLuxottica (+1.38% to 165.15 euros), or even Danone (+1.86% to 53.68 euros).
On the other side of the Atlantic, the main equity indices ended Monday’s session in the green, with reduced volatility, like the Dow Jones (+0.45% to 33,912 points) and the Nasdaq Composite (+0.62% to 13,128 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, climbed 0.40% to 4,297 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 $1.0160. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $88.50.
To follow as a priority on the statistical agenda this Tuesday, the German ZEW index at 11:00 a.m. and for the United States: housing starts and building permits at 2:30 p.m. as well as the monthly federal report on industry at 3:15 p.m.
KEY GRAPHIC ELEMENTS
The bullish engulfing structure of July 19, very clear, and marked in addition by an overrun of the moving average, the formation of a marubozu, was followed by a consolidation in a pennant, on the upper part of its body. Technically, the short-term bullish message was fully reinforced, with a subsequent confirmation: the upward crossing of the 20-day moving average on its 50-day counterpart, which had not happened since the 24 December 2021. The current challenge is a sustained breach of resistance at 6,550 points. The characteristics of the crossing, in particular in terms of volatility and volumes, will support its credibility if necessary.
FORECAST
In view of the key graphic factors that we have mentioned, our opinion is positive on the CAC 40 index in the short term.
This bullish scenario is valid as long as the CAC 40 index is above the support at 6382.00 points.
Hourly data chart
Chart in daily data
©2022 News Bulletin 247
I am currently a news writer for News Bulletin247 where I mostly cover sports news. I have always been interested in writing and it is something I am very passionate about. In my spare time, I enjoy reading and spending time with my family and friends.
