(News Bulletin 247) – Market psychology, depressed but without access of fear, remains unchanged on the Parisian market which lost, through its barometer the CAC 40 0.13% to 5,833 points. Digesting much stronger than expected US employment numbers is counterintuitively difficult, as Minutes of the Fed will be published this evening, and the consumer price indices across the Atlantic tomorrow.
“Once again, in this very unique period, “good news is bad news”, “clarifies Thomas Giudici, co-head of bond management at Auris Gestion, meaning that any good news on the health of the American economy is a further step towards pursuing a belligerent monetary policy. “To curb some of the inflationary pressures, the Fed must therefore appease this labor market, even if it means “doing too much”. Employment figures have therefore become one of the compasses for investors”, for the ECOFI strategists.
The market also remains reeling from the publication at the beginning of the week of the Sentix index of investor confidence in the Euro Zone, at its lowest since May 2020. The barometer value indicator sank to -38, 3, missing yet pessimistic expectations, at the lowest since May 2020. economic, there is now also a growing likelihood of an escalation of the military conflict in Ukraine. Overall, there is little reason to hope”, could we read on the cold and laconic commentary accompanying the publication of the firm specialized in behavioral finance… The Japanese bank Nomura abounds, for which “there is little room for a respite to come”, and which remains pessimistic about the dynamics of the index, materializing a reminder of a scenario of “recession imminent”.
The International Monetary Fund (IMF) lowered its forecast for global growth to 2.7% in 2023, 0.2 points lower than its previous estimate in July. The institution points to the risks of recession to come under the effect of persistent inflation and the conflict in Ukraine. The IMF still anticipates global growth of 3.2% for the current year.
On the stock side, the technology sector is in the wrong direction after the measures taken by Washington on the export of semiconductors to China. STMicroelectronics lost more than 3%, Worldline lost 2.2% while Dassault Systèmes ended close to balance at 33.84 euros. Capgemini fell 1.50% as Jefferies removed the French group from its list of favorite European stocks. ArcelorMittal was also ousted from this list and also ended down 1.3% on Tuesday.
On the other side of the Atlantic, the major equity indices ended in mixed order, with the Dow Jones managing to gain 0.12% to 29,239 points and the Nasdaq Composite losing 1.10% to 10,426 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, fell 0.65% to 3,588 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 $0.9730. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $89.20.
To be followed as a priority on the statistical agenda this Wednesday, the producer price index across the Atlantic at 2:30 p.m. and the Fed Minutes, the traditional report of the last FOMC, at 8:00 p.m.
KEY GRAPHIC ELEMENTS
The protest reaction that began on September 30 has emptied its energy reservoir, the October 05 harami having been confirmed by a close on Friday at the October 04 opening level.
We mentioned Monday a “danger”, at this stage, that of the opening under the gap of October 04, graphically isolating four sessions, subject to preservation of the gap at the close on Monday. However, the index came during the session to fully fill its opening gap. No remainder of the October 4 gap is visible. These elements militate for a continuation, in decreasing volatility, of a decline towards 5,640 points, after which a short reaction is possible.
In the immediate term, the moving average at 20 hours (in dark blue in hourly view) exerts a strong pressure.
FORECAST
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 is trading below the resistance at 6000.00 points.
Hourly data chart
Chart in daily data
©2022 News Bulletin 247
I am Janice Wiggins, and I am an author at News Bulletin 247, and I mostly cover economy news. I have a lot of experience in this field, and I know how to get the information that people need. I am a very reliable source, and I always make sure that my readers can trust me.
