(News Bulletin 247) – The CAC 40 (-0.52% to 6,607 points) continued its hesitant oscillations, the result of a confrontation between buyers and sellers near an important technical zone between 6,550 and 6,700 points. An accumulation phase is settling on this threshold being redefined, while investors are not uniting around a single scenario for the trajectory of federal rates, and diplomatic tensions between Moscow and NATO are rising a notch.
In terms of statistics, the notable event on Wednesday concerned retail sales across the Atlantic, beyond expectations for the month of October (+1.3% monthly regardless of the basket of products selected). What reduce the likelihood of seeing the Fed “soften” its monetary policy, hope glimpsed last week after the publication of consumer price indices, and maintained this week with producer prices.
On the stock side, the renewed geopolitical tensions benefited defense groups, Thales recorded the second largest increase in the CAC 40 (+2.6%) while Dassault Aviation, the manufacturer of the Rafale, rose by 1.4%. , the two groups having experienced respective peaks at 3.8% and 4.7% during the session. At the other end of the spectrum, Air France-KLM fell 10.5% after launching an issue of hybrid debt securities and while Air France faces the risk of a strike for this winter.
On the other side of the Atlantic, the main equity indices closed Wednesday’s session in the red, like the Dow Jones (-0.12% to 33,553 points) but especially the Nasdaq Composite (- 1.54% at 11,183 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, lost 0.83% to 3,958 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 $1.0380. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $84.70.
To be followed as a priority on the statistical agenda this Thursday, the consumer price index in the Euro Zone at 11:00 a.m. (final data for the month of October) and across the Atlantic, the Philly Fed manufacturing index and weekly listings for unemployment benefits at 2:30 p.m.
KEY GRAPHIC ELEMENTS
The good surprise of the slowdown in inflation on the other side of the Atlantic, if it caused a surge in the Nasdaq Composite and the Nasdaq 100, the S&P500 to a lesser extent, has a relief effect on this side of the Atlantic. The continued mobilization of the buying camp after the statistical publication was reflected on Thursday 10/11 by an ample marubozu, which came to cover the bearish gap of August 22, with a clear return to a resistance zone at 6,550 points. The ability to overcome it in large volumes would pave the way for continued rally of October. It is precisely this level that is being redefined.
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 6898.00 points would revive the tension in the purchase. While a break of 6390.00 points would relaunch the selling pressure.
Hourly data chart
Chart in daily data
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