CAC 40: Omicron will have revealed the hypersensitivity of the market

(News Bulletin 247) – Under the huge bearish gap of Friday 11/26, the oscillations of the CAC 40 are choppy, and particularly volatile and nervous around 6,800 points, in a wide amplitude of around 250 points. The question of the potential consequences of the appearance of a new variant of the coronavirus on the economic recovery and monetary normalization gives knots to the brain in the trading rooms. In any case, the discovery of the Omicron variant of Covid 19 is […] the warning that at least as much as inflation, the virus remains a determinant of the markets which must be approached not as a hypothesis, but as a certainty with an unknown temporality “, summarizes Alexandre Hezez, strategist for the Richelieu Group.

The Paris Stock Exchange barometer gained 1.48% on Monday to 6,865 points.

In terms of statistics, the dynamics of industrial orders in Germany for October completely missed expectations, falling by almost 7% month on month. In addition, the Sentix index of investor confidence in the Eurozone came out sharply down to 13.5, below expectations.

In terms of values, there was a sudden resurgence of appetite for stocks that had suffered the most from the pandemic, starting with the operator of shopping centers Unibail-RW, which took 6.57% to 61.96 euros, followed Worldline (+ 5.43% to 48.455 euros) and Safran (+ 5.19% to 103.78 euros).

On the other side of the Atlantic, the main equity indices gained ground in the first session of the week, still with a rotation in the styles of values, the Value taking revenge. The Dow Jones gained 1.87% to 35,227 points and the Nasdaq Composite 0.93% to 15,225 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, rose 1.17% to 4,591 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 1,1290$. A barrel of WTI, one of the barometers of risk appetite in financial markets, was trading around 70,30$.

To be continued on the agenda this Tuesday, to follow as a priority the ZEW index of confidence in the German economy at 11:00 am, as well as the revised quarterly GDP data in the Eurozone at 11:00 am also.

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. What will be decisive in the immediate future is the attitude of the barometer as it approaches the lower limit of the gap mentioned, a limit which is worth 6,900 points.

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 6900.00 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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