(News Bulletin 247) – The barometer of Paris stock exchanges, the CAC 40 (+0.39% to 6,441 points yesterday at the close) is expected to drop slightly this Wednesday, as the results of the mid-term elections approach. mandate in the United States today, and US inflation figures tomorrow.
The results of midterms are far from final. In the immediate future, what emerges is that the Republican wave feared by Biden in the House of Representatives is far from obvious. And the forces present in the Senate, at this stage, are perfectly balanced.
On an annualized basis, and for the broadest product basket (food and energy included), prices are expected to rise by 7.9%, compared to 8.2% last month.
“Investors will be turned to the many speeches of central bankers and at the end of the week, by the publication of consumer price indices (CPI) in the United States”, notes Vincent BOY, market analyst for IG France. “The latter should show a reduction in the rise in inflation in the US, but the figures remain too high and this could lead to the end of this technical rebound in the financial markets.”
“U.S. inflation data released this week will come under scrutiny, after the latest jobs data confirmed the continuing labor shortage. policy of extreme tightening”, note the strategists of the BlackRock Investment Institute, in the conclusions of their forum on the “new market regime”.
Side values, investors are far from applauding the strategic plans presented Tuesday morning by Renault and Carrefour. At the bottom of the CAC 40, the diamond brand fell 3.30% to 30.62 euros after the update of its “Renaulution” strategic plan which notably provides for the creation of an entity dedicated to its electrical activities, Ampere. The Carrefour distributor gave back 1.75% after the announcement of its “Carrefour 2026” strategic plan. In contrast, STMicroelectronics rose 4.4%. The title benefits from the support of an analyst, in this case Morgan Stanley, which takes over the coverage of the specialist in “line-weighted” semiconductors, targeting 36 euros.
On the other side of the Atlantic, the main equity indices ended Tuesday’s session in positive territory, like the Dow Jones (+1.02% to 33,160 points) or the Nasdaq Composite (+0 .49% at 10,616 points). The S&P 500, benchmark barometer of risk appetite in the eyes of fund managers, nibbling 0.56% to 3,828 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 $1.0060. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $88.90.
To follow as a priority on the statistical agenda this Wednesday, crude stocks in the United States at 4:30 p.m.
KEY GRAPHIC ELEMENTS
After a gap of shortness of breath (01/11), the barometer traced on Tuesday November 1st a doji with a very pronounced high shadow, uninviting. The confirmation was clear on Wednesday with a bearish engulfing combination in slightly higher volumes, then Thursday with a bearish gap. However, the opening in island reversal on Friday and the gains made during the session itself, only confirmed the nervousness and the contrarian nature of the short-term market. Friday’s session is therefore not predictive. Overall, the index is skating on resistance levels (6390 – 6550 points), in trading volumes which contract very significantly as major deadlines approach.
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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