(News Bulletin 247) – In a market atmosphere still as nervous and indecisive as major monetary meetings approach, the CAC 40 managed to grab 0.46% on Friday to 6,677 points, with the support of cyclical files emblematic and banking. The assessment of this week dominated by the lack of appetite of investors for risk is negative. The CAC 40 lost 0.96% on a weekly basis, thus breaking a series of nine weeks of increases. On Friday, Saint Gobain managed to close up 3.52% at 46.80 euros, Alstom 2.30% at 24.04 euros, BNP-Paribas 1.71% at 52.89 euros, Schneider Electric 1.69% at 138.8 euros.
The technical, graphic and chartist situation betrays a form of nervous hesitation at the top of rally ahead of the outcome of the Fed’s FOMC (12/14) and the ECB’s Governing Council (12/15).
For Erick Muller, Director of Products and Investment Strategy at Muzinich & Co, “the FOMC members’ projections (the DOTS) will send a clear message about the intentions to keep rates high for a long time, so as not to validating market expectations of a “pivot” which may seem premature for the Fed. This should result in a median projection up towards 5% for 2023 but also much more concentrated projections between 4% and 5% for 2024 than ‘last September, where the 2024 projections were very scattered.”
It is this whole essential question of the shape of the Fed Funds curve that will focus the attention of the markets for this last part of the year: more flattened, the progression could be slower, but what about the “terminal” rate? “?
In statistics on Friday, the producer price index inflated by 0.3% in November, against a target of 0.2%, and excluding food and energy from the basket, the index climbed 0.4% against consensus at 0.2%. Marked increase to report on the consumer confidence index (preliminary data, U-Mich), to 59.1, well above the consensus.
On the other side of the Atlantic, the main equity indices contracted on Friday, like the Dow Jones (-0.90% to 33,476 points) or the Nasdaq Composite (-0.70% to 11 004 dots). The S&P 500, benchmark barometer of risk appetite in the eyes of fund managers, lost 0.73% to 3,943 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 $1.0520. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $72.20.
No major indicator to follow as a priority on the statistical agenda this Monday.
KEY GRAPHIC ELEMENTS
The prices of the flagship Parisian index are now at the top of a tidied up between 6,550 points and 6,740 points, in which, until now, the beginnings of a chartist pattern were taking shape. This would only continue in the event of a decline in the lateral channel. Conversely, a clear overshoot, on an uncontested gap for example, would pave the way for a rapid achievement of 6,900 points. In the immediate future, a new breath in prices below 6,740 points is the preferred scenario. Technically, there is no solid enough material support to oppose a consolidation towards 6,550 points. The week 49 candle sends an unprepossessing message.
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
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