CAC 40: At the heart of a large consolidation figure

(News Bulletin 247) – Transition session Thursday on the Parisian market, whose benchmark barometer, the CAC 40, symbolically lost 0.09% to 7,008 points, in very discreet volumes, operators reserving their initiatives probably for this Friday, with the eagerly awaited release of the latest US inflation figures. Excluding food and energy (the most volatile elements), prices are expected to increase monthly by 0.5%. It is in this rather cool atmosphere that the Fed will approach its next Monetary Policy Council next week.

Because it is the question of the pace of monetary tightening in 2022 that will be a powerful determinant. “The question of the number of rate hikes is at the heart of the debates. [Les opérateurs ] “now foresee three rate hikes next year, while maintaining those anticipated for 2023. The possible change in the Fed’s monetary policy trajectory has triggered a sharp increase in market volatility”, for Mabrouk Chetouane, director Research and Strategy of BFT Investment Managers. However, this number of expected increases may change rapidly, creating volatility in the markets.

While relief is on the health front, the thorny Chinese real estate file painfully resurfaces, with the default of Kaisa and Evergrande.

In terms of statistics, investors took note of weekly registrations for unemployment benefits in the United States, in contraction stronger than expected, to 184,000 new registrations according to the latest figures from the Department of Labor.

In terms of values, Veolia and Eurofins dominated the ranking of the flagship index without any particular news with a gain of 2.1% each. Teleperformance (+ 1.4%) and Capgemini (+ 1.2%) did not really suffer from the decline in the Nasdaq. On the contrary, aeronautical stocks retroceded part of their recent gains (-1.6% for Airbus, -1.45% for Safran), while luxury goods still suffered some profit taking, Kering (-1.2%) especially.

On the other side of the Atlantic, the main equity indices closed in the red, the Growth files having been the most affected. If the Dow Jones suffered only a symbolic contraction to 35,754 points, the Nasdaq Composite lost 1.71% to 15,517 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, lost 0.72% to 4,667 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$. A barrel of WTI, one of the barometers of risk appetite in financial markets, was trading around 70,60$.

To be continued on the agenda this Friday, to be followed as a priority by consumer prices in the United States at 2:30 p.m. Also follow the US consumer confidence index (U-Mich) in preliminary data, at 4:00 p.m.

KEY GRAPHIC ELEMENTS

Omicron will have had the effect of revealing the hypersensitivity of the Parisian market, in particular its “Growth” files (for which the valuation multiples are high), 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 now defined, between 6,650 and 7,185 points.

PREVISION

In view of the key graphic factors that we have mentioned, our opinion is negative on the CAC 40 index in the short term.

This bearish scenario is valid as long as the CAC 40 index quotes below the resistance at 7185.00 points.

Hourly data graph

Daily data graph

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