CAC 40: Zero Covid, Xi persists

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(News Bulletin 247) – The market will reconnect with major benchmarks, particularly from the United States, after the long festive Thanksgiving weekend. While Wall Street only reopened on Friday for a shortened session, the CAC 40 ended almost unchanged (+0.08% to 6,712 points), in a quasi-macroeconomic desert. Only German Q3 GDP, published up 0.4% quarter on quarter, came to liven up the session. In the immediate future, the barometer of the Paris Bourse is expected to fall this morning at the opening, while the stubbornness of the Chinese authorities in the radical Zero Covid policy tenses the financial markets.

At values ​​in Paris on Friday, OVH Group closed down nearly 0.94% to 14.155 euros. The “cloud” specialist had however started the session with a bang (+6.3% around 9:15 a.m.) after confirming financing from the European Investment Bank for a maximum amount of 200 million euros. Thanks to good half-year accounts, champagne producer Laurent Perrier rebounded 5.7% after a timid start to the session. While a small rise in bond rates is observed, property companies, which are particularly sensitive, have retreated. Icade lost 2.8%, Mercialys (-0.7%) and Klépierre (-1.7%).

Across the Atlantic on Friday, as Wall Street reopened for a shortened session, the Dow Jones gained 0.45% to 34,347 points and the Nasdaq Composite contracted 0.52% to 11 226 dots.

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 $78.20.

To be followed as a priority on the statistical agenda this Monday, the M3 money supply in the Euro Zone at 10:00 a.m., and a speech by Mrs. Lagarde, President of the Fed, at 3:00 p.m.

KEY GRAPHIC ELEMENTS

The rally initiated on 10/04 resulted in a sharp return to a resistance zone at 6,550 points. The ability to overcome this in high volumes would pave the way for a continuation of this October rally. It is precisely this level that is being redefined, with congestion around 6,600 points. In the immediate future, the inability to create new high points augurs at least a breather. A short corrective phase towards the 20-day moving average (in dark blue) can also take shape at any time, especially as a price/volume divergence sets in. It is now the look of a potential chartist figure that we will have to identify as soon as possible.

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 6898.00 points.

Hourly data chart

Chart in daily data

CAC 40: Zero Covid, Xi persists (© ProRealTime.com)

©2022 News Bulletin 247

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