(News Bulletin 247) – The complicated session on Wall Street on Wednesday will mechanically have a negative impact on the opening for the CAC 40 on Thursday, while operators are nervously awaiting the outcome of the Board of Governors of the European Central Bank. Not that the actual decision on the rates is the subject of panting suspense – the option of a 75 bp hike is almost certain – but it is the overall attitude of the Institution, its inflections possible in his language, his comments at the press conference which will be scrutinized, in particular in the light of the latest inflation figures, the IFO of the business climate in Germany and the PMI barometers of activity at half mast .
“Beyond the probable and consensual decision to raise rates by 75 basis points, it is more the speech of Ms. Lagarde that will be scrutinized”, notes Emmanuel Auboyneau, Managing Partner of Amplegest. The European economy is slowing down noticeably and is likely to enter recession soon.”
“Should the ECB continue to act strongly on inflation, even if it means worsening an already worrying economic situation, or should it, like the Federal Reserve in the United States, start adopting a less offensive tone? Lagarde walks on eggshells and has to keep a difficult balance between growth and inflation. This is the whole point of this meeting which will set the tone for the coming weeks.”
In terms of statistics yesterday, the Conference Board’s consumer confidence index came out this month at 102.5, down sharply below expectations. Note this Wednesday a much larger than expected widening of the deficit, certainly structural, of the trade balance of goods in the United States: -92.2 billion dollars, for the month of September.
On the values side, Orpea again suffered violent releases (-33.34% to 9.826 euros) while the operator of retirement homes announced that it had started a procedure to restructure its debt with its creditors with potentially more than 4 billion euros. euros of debt that could be transformed into capital. OVHcloud impressed (+8.6%) after exceeding its forecasts for its 2021-2022 financial year and delivering encouraging new prospects. Atos fulfilled its contract and gained 14% at the close. The digital services company saw its revenues exceed expectations on a comparable basis in the third quarter and also slightly refined its annual growth target upwards.
On the other side of the Atlantic, the main equity indices ended in scattered order, the Dow Jones managing to grab 0.01% to 31,839 points for a symbolic close in the green, while the Nasdaq Composite (- 2.04% to 10,970 points) was weighted down by quarterly copies from Microsoft and Alphabet. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, fell 0.74% to 3,830 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 $1.0070. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $84.60.
To follow as a priority on the statistical agenda this Thursday, the monetary policy decision of the ECB at 2:15 p.m., and the consecutive press conference at 2:45 p.m. To be followed across the Atlantic, the very first estimates of Q3 GDP, durable goods orders and weekly registrations for unemployment benefits at 2:30 p.m.
KEY GRAPHIC ELEMENTS
The flagship Parisian equity index continues to form a wide wedge, with an exit from the bottom (not yet in the news) would rhyme with a resumption of the bearish current in significant volatility. The good performance at this stage of stocks with high current beta, combined with trading volumes, leaves the field open to a short period of balance of forces present. Two scenarios are now considered for the very short term, once the precarious balance is broken: the entry into a consolidation pennant, or the formation of a new corrective leg.
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 6550.00 points.
Hourly data chart
Chart in daily data
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