(News Bulletin 247) – Without completely breaking it, the Minutes from the Fed have somewhat refreshed the mood on the equity markets. Published yesterday at 8:00 p.m., so well after the closing in Paris, this traditional report of the last meeting of the Monetary Policy Committee confirmed the resolutely “hawkish” tone of the Institution. The option of an increase of 50bp (instead of the widely anticipated 75bp) for the September deadline, however, has not been formally ruled out.
The CAC 40 index lost 0.97% yesterday to 6,528 points, confirming the hypothesis that the test of 6,550 points is still in progress.
In terms of statistics, the retail sales figures, a dial still closely watched in trading rooms in the land of consumer queen, were published yesterday. If for the month of July, sales have in their broadest sense stagnated, they have, excluding automobiles, largely exceeded expectations at +0.4% on a monthly basis, according to the publication of the Census Bureau.
On the stock side, renewed risk aversion penalized cyclical stocks. Automotive suppliers Faurecia, Valeo and Akwel lost 8.4%, 4.3% and 5.6% respectively. Alstom fell 6.82% to 22.39 euros, in a relatively high level of activity, more than 2,300,000 pieces. Heavyweight on the Parisian coast, Sanofi fell 5.7% after announcing the cessation of global development of amcenestrant, a potential treatment for certain breast cancers.
On the other side of the Atlantic, the bull run was halted yesterday, with the Dow Jones dropping 0.50% to 33,980 points, and the Nasdaq Composite 1.25% to 12,938 under the effect of the rise in Treasuries 10 yrs. The S&P 500, benchmark barometer of risk appetite in the eyes of fund managers, lost 0.72% to 4,274 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 $88.00.
To follow as a priority on the statistical agenda this Thursday, the consumer price index in the Euro Zone at 11:00 a.m., and for the United States, the weekly registrations for unemployment benefits as well as the manufacturing index Philly Fed at 2:30 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. The notion of sectoral federation will also be important in deciding the question.
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 quotes above the support at 6248.00 points.
Hourly data chart
Chart in daily data
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