(News Bulletin 247) – We are at the heart of a protest reaction, the volatility of which is measured by the yardstick of the initial depreciations on the Paris market. And this even though the underlying trend remains bearish.
The CAC 40, the reference barometer of risk appetite in the eyes of fund managers, eroded 0.55% to 5,794 points (low point at 5,654, 140 points below), with the support of folders Value and industrial, like Stellantis (+1.87% to 12.506 euros), Engie (+2.25% to 12.108 euros), Veolia Env (+2.38% to 20.18 euros), Saint Gobain ( +2.93% to 38.135 euros), TotalEnergies (+3.08% to 49.76 euros), and ArcelorMittal (+3.61% to 21.41 euros). The pre-opening suggests a largely green first part of the session on Tuesday, even though there is no shortage of sources of fear, both in monetary, geopolitical, macroeconomic and microeconomic terms.
As such, fears about the financial health of Credit Suisse will remain relevant until they are lifted. Moreover, short sellers came out of the woodwork on Credit Suisse with short positions in shares of the Swiss banking group which rose by 25.4 million shares, over the past week, according to S3 Partners. , quoted by the Agefi-Dow Jones. “In Europe, the case of Credit Suisse is of great concern to investors, after comments from the boss of the Swiss bank and a sharp increase in its credit default swaps (CDS). These financial products reflect the cost of insurance against a default of the entity on which they are backed. Credit Suisse CDS are now reaching the levels observed in 2009 during the subprime crisis” deciphers Vincent Boy, Market Analyst at IG France.
In terms of statistics on Monday, the publication, in final data, of the German industrial PMI, came out at 47.8, against 48.3 in the first estimate, was disappointing. An activity indicator that alone militates for the imminent entry into recession of the first economy in the Euro Zone.
Phil Smith, Economics Associate Director at S&P Global Market Intelligence, coolly commented on the figures: “Soaring energy prices have ended the slowdown in input cost inflation seen in recent months, the leading to a reacceleration in September. If demand continues to fall in the coming month as companies expect, sustaining higher costs will inevitably become increasingly more difficult, which will mechanically squeeze margins. Indeed, we We’re already getting reports of some manufacturers trying to improve cash flow by depleting inventory from purchases.”
On the other side of the Atlantic, the main equity indices closed sharply higher, thanks to a significant easing in the fixed income markets. The Dow Jones gained 2.66% to 29,490 points and the Nasdaq Composite 2.27% to 10,815 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 2.59% to 3,678 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 $0.9860. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $84.00.
To follow as a priority on the statistical agenda this Tuesday, the producer price index at 11:00 a.m., and new job offers (JOLTS) in the United States at 4:00 p.m.
KEY GRAPHIC ELEMENTS
The symbolic 6,000 points were broken under validating conditions of volume and volatility, and the new work zone identified between 5,785 and 6,000 points will have been crossed in one go last week. At this stage, the possibility of a technical reaction will take shape. We lacked the materialization of the conditions for its implementation.
The ability to close above the September 26 close points (reversed hammer) is confirmed, but in low and decreasing volumes. We maintain the idea of a continuation of a challenge rebound, but for a handful of sessions only. The 20-day moving average (in dark blue) will be there to call the market to order. In the meantime, it is the files with a very strong current Beta effect that will pull the market up in this handful of sessions, with automotive suppliers in mind.
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 is above the support at 5640.00 points.
Hourly data chart
Chart in daily data
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