CAC 40: A little oxygen above 6,000 points

(News Bulletin 247) – The CAC index (+1.94% to 6,250 points) closed Tuesday almost at its session highs, against a backdrop of hopes of a slowdown in the pace of US monetary tightening, and while opens a new Governing Council of the ECB. Its outcome, tomorrow, will be a hot spot in the underworld of the week.

“The ECB should raise its key rates by 75 basis points at its meeting on October 27 and commit to tightening them further over the coming months”, anticipates Frederik Ducrozet, Head of Macroeconomic Research at Pictet Wealth Management, who does not does not expect “clarification on what it considers the ‘neutral rate’, but a growing consensus seems to be in favor of a 2% deposit rate by the end of the year (which implies a 50 basis point hike in December), with a reassessment of the economic and inflation outlook in early 2023.”

On the American monetary policy side, investors continue to cling to information from the Wall Street Journal according to which certain members of the Federal Reserve would not be against the idea of ​​slowing down the pace of its monetary tightening from December before stopping the interest rate hikes early next year. Also according to this article, the institution would be heading for a rate hike of 0.75 percentage points at its next meeting in early November.

In terms of statistics, the main meeting on Tuesday was the publication of the Conference Board consumer confidence index, which came out this month at 102.5, down sharply below expectations.

In terms of values, Air Liquide seduced the market. The industrial gas specialist finished at the top of the CAC (+6.7%) driven by robust activity in the third quarter, thanks in particular to its price increases. On the other hand, Rémy Cointreau lost 4.7% while the group delivered its half-yearly turnover for its entire 2022-2023 financial year ending next March. Investors are particularly concerned about a normalization of the group’s growth. Carmat for its part won 6.6% after announcing that it had obtained the authorizations to resume the implantations of its artificial heart.

On the other side of the Atlantic, the main equity indices ended Tuesday’s session in the green, like the Dow Jones (+ 1.07% to 31,836 points) and especially the Nasdaq Composite (+ 2.25% at 11,199 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, rose 1.63% to 3,859 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 $0.9970. 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 Wednesday, on the American side, the trade balance of goods at 2:30 p.m. and crude stocks at 4:30 p.m.

Please note, for holders of positions on the RD: the monthly liquidation will take place at the close of the day’s trading session. This Wednesday, October 26 therefore marks the last trading day for SRD orders for the current month.

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.

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 6550.00 points would revive the tension in the purchase. While a break of 6142.00 points would relaunch the selling pressure.

Hourly data chart

Chart in daily data

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