CAC 40: Difficult digestion of the FOMC of the Fed and the Board of Governors of the ECB

(News Bulletin 247) – With the support of TotalEnergies in particular (+1.78%), in the wake of black gold prices, the CAC 40 managed to gain 0.32% to 6,473 points on Monday, at the start of a week with significant volatility potential, after the belligerent tone adopted by the world’s big moneymakers (ECB and Fed in the lead), in week 50. The IFO index of the business climate in Germany, in rising to 88.6, beyond expectations, will have allowed the equity market to resist after the intense decline of the past week.

“The FED, but also the ECB and the Bank of England clearly reminded investors of reality during their monetary policy meeting held last week”, observes Sébastien GRASSET (Auris Gestion): “if the pace and scale increases in key rates will be, as expected, less (50 bps increase for the three central banks at their last meeting instead of the previous 75 bps), the fight against inflation is far from over and key rates will continue to rise with certainly staying at a high level for a longer time than bought by the market.”

On the values ​​side, the oil services group Vallourec rose 3.25% to 11.435 euros. Elior plunged 8.7% after obtaining an adjustment of its debt ratio commitments from its creditors. Virbac dropped 5.4% after announcing that its restated current operating profit margin was expected between 13% and 14% at constant exchange rates next year, compared to an expected figure between 14% and 15% this year.

On the other side of the Atlantic, the main equity indices ended the first session of the week in the red, like the Dow Jones (-0.49% to 32,757 points) and especially the Nasdaq Composite (-1.49% to 10,546 points), very sensitive to the monetary issue. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, lost 0.90% to 3,817 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 $1.0600. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $75.20.

To be followed in priority on the macroeconomic agenda this Tuesday, housing starts and building permits in the United States at 2:30 p.m., and the consumer confidence index in the Euro Zone at 4:00 p.m.

KEY GRAPHIC ELEMENTS

The three-color index traced in one session the entire amplitude of the consolidation figure above 6,550 points, the integrity of which was threatened. The close on Thursday 15/12 was very close to the lows of the session, and the power of the volumes came to lend credence to the option of a break, at the end of this threshold. First attempt on Friday, with validation by the volumes. If the sectoral federation is not yet there, the technical signal sent is clearly negative.

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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