CAC 40: volatility sets in

(News Bulletin 247) – Friday, the CAC 40 index ended a new session of high volatility, down 0.44% to 6,765 points. Investors remain particularly nervous since the appearance (or at least the discovery) of a new variant of the coronavirus with Covid-19, a variant called Omicron by the WHO, about which scientists do not know much at this stage. But this dose of uncertainty has sown trouble in an already complex market equation with inflation that is no longer transitory on both sides of the Atlantic.

Federal Reserve boss Jerome Powell cast a cold spell last week by acknowledging, in response to a question about the appropriateness of retaining the term “transient” to qualify the current spike in inflation, which the time had come to withdraw. this word … For the president of the Fed, quite recently chosen for a second mandate, if the price increases are globally linked to supply problems, these increases have spread more globally and the risk of an inflation lasting more high has increased. In other words, it is a bit of the whole scenario put forward in recent months that has been demolished, and the financial manager recognizes that we will have to discuss a more rapid withdrawal of unconventional support measures, without even talking about a rate tightening.

In terms of statistics, note Friday on the one hand the confirmation of an unemployment rate of 7.3% of the working population in the Euro Zone, but above all a surprise increase of 5.4% in “producer” prices on a monthly basis in the Euro Zone, that is to say in comparison with the month of October over the month of September. If we compare to October 2020, the outbreak is … 21.9%. Across the Atlantic, it was the federal employment report in November that focused attention on the completely missed target on the monthly federal employment report. The report shows that the US economy created over the period “only” 210,000 jobs in the private sector (excluding agriculture). With wage dynamics showing no signs of overheating, the report gives J. Powell a bit of slack. Already earlier in the week, Jean-Jacques Friedman – Investment Director of VEGA Investment Managers, a subsidiary of Natixis Wealth Management, wondered whether the appearance of this new variant would not ultimately grant the most precious asset to the big money manager: the time ?

In terms of values, Dassault Aviation gained 6.48% to 89.60 euros, thanks to the signing of an order for 80 Rafale fighter jets to the F4 standard from the United Arab Emirates. The biotech compartment was marked by a notable disappointment for Valneva, whose price dropped 14.5% after the results of a trial at the University of Southampton which studied six vaccines as a booster, including the VLA2001 of the French group .

Major equity indices ended in the red on Friday, with growth records the most affected. The Dow Jones contracted slightly, 0.17% to 34,580 points, while the Nasdaq Composite edged down 1.92% to 15,085 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, lost 0.84% ​​to 4,538 points.

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 1,1280$. A barrel of WTI, one of the barometers of risk appetite in financial markets, was trading around 67,90$.

To be continued on the agenda this Monday, to follow as a priority the Sentix index of investor confidence in the Eurozone at 10:30 am. Released at 8:00 am, the momentum for industrial orders in Germany for October fell short of expectations, falling nearly 7% month-on-month.

KEY GRAPHIC ELEMENTS

We were awaiting the plot of the amplitude of a large figure of large consolidation to come. This has been done since Friday 26/111, and this marked increase in downward volatility. Result: a huge bearish gap and a close on the low points of the session almost. In addition, the bullish gap of November 1 was fully filled during the session, showing the installation of the flagship index in a new framework. A continuation of nervous oscillations is envisaged.

PREVISION

With regard to 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 crossing the 7000.00 points would rekindle the purchase tension. While a break of 6656.00 points would revive the selling pressure.

Hourly data graph

Daily data graph

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