CAC 40: Omicron will have revealed valuable behavioral clues

(News Bulletin 247) – The CAC 40 index has regained, on a school marubozu candle (long body, without any shadow, neither high nor low), 2.91% to 7,065 points, technology and luxury in the lead, whereas new information, reassuring at this stage, on the new variant “Omicron”, relieved the markets. In particular, the director of the emergency department of the WHO, Mike Ryan, wished to reassure on the dangerousness of Omicron.

Anthony Fauci, the Mr. Health of the White House, relying on the information provided by South African doctors had already been relatively optimistic Monday on the degree of dangerousness of Omicron, the new variant of the coronavirus. The scientist – appointed in January 2020 to the crisis unit formed by Donald Trump against the coronavirus, and confirmed by his successor Joe Biden as his main adviser in the matter – was even more affirmative on Tuesday during an interview telephone to AFP. While it will take at least two weeks to determine this precisely, “it is almost certain” now that Omicron “is not more serious than Delta.” Better, some signs suggest “that it could even be even less severe”. Conversely, Anthony Fauci believes that the new variant is “clearly highly transmissible”, arguably more than Delta.

Result in a hypersensitive market since Friday 11/26: continuous mobilization during the session of the buying camp, in particular towards growth stocks, like STMicroelectronics (+ 5.68% to 44.40 euros) or Kering (+ 5.74% to 735.20 euros).

In terms of statistics, the German “ZEW” came out in the immediate vicinity of 30 points, in very slight contraction compared to the consensus, and thus largely beating the target.

ZEW Chairman Professor Achim Wambach however made the following cautious comments: “The German economy is suffering significantly from the latest developments in the COVID-19 pandemic. Persistent bottlenecks weigh on production and retailing. Falling economic expectations show that hopes for much stronger growth over the next six months are fading. In particular, earnings expectations of export-oriented and consumer-related industries are assessed more negatively ”.

Across the Atlantic, the major equity indices rose significantly on Tuesday, with particular emphasis on growth records. While the Dow Jones gained 1.40% to 35,719 points, the Nasdaq Composite jumped 3.03% to 15,686 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 2.07% to 4,686 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$. A barrel of WTI, one of the barometers of risk appetite in financial markets, was trading around 71,50$.

To be continued on the agenda this Wednesday, to follow as a priority the new job offers (JOLTS) in the United States at 4:00 p.m. and crude stocks across the Atlantic at 4:30 p.m.

KEY GRAPHIC ELEMENTS

Omicron will have had the effect of revealing the hypersensitivity of the Parisian market, in particular its Growth files, mainly in luxury goods and technology. Result: the resumption of an unconditional buyer’s rally is no longer on the agenda. A continuation of broadband nervous oscillations should be considered. Band whose amplitude is defined, between 6,650 and 7,185 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 7142.00 points would rekindle the purchase tension. While a break of 6728.00 points would revive the selling pressure.

Hourly data graph

Daily data graph

©2021 News Bulletin 247