CAC 40: Watch out for the saloon door

(News Bulletin 247) – Session of very high volatility yesterday on the main equity indices on both sides of the Atlantic, with very large differences – it’s spectacular on the S&P 500 – between the low points and the high points of session. Initially, the US inflation figures, one of the statistical hot spots of the week, brutalized the order books, and the buying camp gradually mobilized. The CAC will finally have succeeded in exceeding 1% gain at 5,879 points.

The publication of the CPIs will have taken on a particular meaning in the aftermath of the Minutes of the Fed, whose main message to remember is the will, whatever the cost, of the Institution to fight against the rise in prices. In detail, the consumer price index, excluding food and energy, jumped 0.6% in September, against a target of +0.4%. For the largest basket of products, inflation reached 8.2% at an annualized rate. Enough to augur a continuation without pause of the process of raising federal rates. Increases in the housing, food and medical care indexes were the largest among many other causes of the seasonally adjusted monthly increase.

Proof that the market, although in a downward trend, offers premiums to contrarian tradestitles Value which have particularly suffered in recent weeks, will have gained a lot of ground on Thursday, like Dericherbourg (+5.04% to 4.29 euros), Faurecia (+5.71% to 12.025 euros), Air France (+ 5.96% to 1.3860 euros), or Elior (+8.55% to 1.879 euros).

On the other side of the Atlantic, the main equity indices rose significantly on Thursday, with buyers mobilizing throughout a session that got off to a bad start, like the Dow Jones (+2.83%). at 30,038 points), or the Nasdaq Composite (+2.23% at 10,649 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 2.60% to 3,669 points. The banking sector will have weighed favorably in the debates.

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 $0.9790. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $89.20.

To be followed in priority on the statistical agenda this Friday, the trade balance in the Euro Zone at 11:00 a.m., retail sales in the United States at 2:30 p.m. and the consumer confidence index (U-Mich, preliminary data) at 4:00 p.m.

KEY GRAPHIC ELEMENTS

At this stage, the underlying downtrend remains relevant despite the reaction, even during Thursday’s session. If the volumes combined with the lower shadow of the candle and the bullish engulfing structure suggest a bullish extension above the 20-day moving average (in dark blue), it will be a question of continuing to anticipate movements annoying, otherwise you will suffer from the “saloon door” effect.

FORECAST

In view of 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 a crossing of 6000.00 points would revive the tension in the purchase. While a break of 5640.00 points would relaunch the selling pressure.

Hourly data chart

Chart in daily data

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