CAC 40: Will the 6,550 points put on their support outfit?

(News Bulletin 247) – The CAC 40 index is still in the confirmation phase, by technical criteria of volatility, volumes and sectoral federation, of crossing an important technical zone at 6,550 points. Yesterday the index (+0.34% to 6,592 points) saw its progress slowed by the publication of a very disappointing barometer indicator on the morale of German investors.

The ZEW index of confidence in the German economy, at -55.3, indeed missed expectations, which were nevertheless highly pessimistic. Dr. Michael Schröder, ZEW researcher and head of the survey, provided the following insights: “ZEW economic expectations are falling slightly again in August after a sharp drop in the previous month. Financial market experts therefore expect a further decline in already weak economic growth in Germany.Continued high inflation rates and expected additional costs for heating and energy lead to lower earnings forecasts for the household consumption sector. for the financial sector are improving due to the assumed further increase in short-term interest rates.”

The benchmarks from the United States, contrasting for housing starts and building permits, rather good in terms of industrial production, will have enabled the Dow Jones to remain in positive territory (+0.71% to 34 152 stitches). The tech-heavy Nasdaq Composite fell 0.19% to 13,102 points. Finally, the S&P 500, the reference barometer of risk appetite in the eyes of fund managers, climbed 0.19% to 4,305 points. And this despite the sharp rise in Walmart shares (+5.11%), against a background of upward revision of the distributor’s annual forecasts, whose dynamics serve as a barometer for retail consumption across the Atlantic.

On the values ​​side, Eramet stood out, taking 7.40% to 107.40 euros, driven by the good results of its Australian comparable BHP which published a net profit multiplied by almost three for its 2021-2022 financial year, closed in June.

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 $87.50.

To be followed as a priority on the statistical agenda this Wednesday, preliminary data for GDP in Q2 for the Euro Zone at 11:00 a.m., retail sales in the United States at 2:30 p.m. Minutes of the Fed, traditional minutes of the last FOMC meeting.

In connection with this last major meeting, “a rebound in the equity market 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.

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 quotes above the support at 6248.00 points.

Hourly data chart

Chart in daily data

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