(News Bulletin 247) – Intense nervousness on the Parisian market yesterday, which is struggling to unite in the face of the spread of the Omicron variant of the Covid-19 coronavirus, the consequences of which in terms of restrictions are already concrete for some of our neighbors Europeans. The CAC 40, after hitting a low point during the session at 6,747 points, managed to limit the damage, losing in closing only 0.82% to 6,870 points.
If the first announcements on this subject were rather reassuring, the exceptional contagiousness of the new strain of the coronavirus still forces several European countries to impose new restrictions, and lowers the morale of operators. “The lockdown announced in the Netherlands will heighten fears that similar measures will be adopted in other European countries in the coming weeks,” writes Lee Hardman, analyst at Mitsubishi UFJ Financial Group. Uncertainty now hangs over what other European countries very affected by Omicron could decide, including the United Kingdom and Italy. Denmark also announced new restrictions last week, in the form of tightened standards in restaurants and cafes.
“As markets try to digest Federal Reserve monetary policy tightening, with asset buyback cuts doubling and a potential rate hike as early as March, Omicron’s threats could accelerate the decline global indices. ” warns Vincent Boy (IG France). “The holiday season could accentuate the phenomenon and force some countries to announce tough restrictions after the end of the year holidays.”, Continues the analyst.
Another source of tension, the prospect of a rejection in the Senate of Joe Biden’s stimulus plan. Senator Manchin refused to validate the 2 trillion stimulus package, postponing negotiations until after the congressional recess period. Following the announcement, Goldman Sachs decided to reduce its growth outlook for 2022 in the United States to 2% against 3% for Q1, 3% against 3.5% for Q2 and 2.75% against 3% for Q3 “notes Vincent Boy (IG France).
Citing in particular the rise in prices and the extent of the debt, the elected representative of West Virginia declared “not to be able to vote for that”. Which sounds a priori the death knell for this huge project – the Senate is, as a reminder, perfectly divided between Democrats and Republicans so the slightest defection tilts the balance.
In the statistical chapter yesterday very little to chew on. Note the leading indicators (BC) index in the United States, up slightly more than expected, to + 1.1%.
On the securities side, Worldline (-6.68% to 45.84 euros) fell the most strongly, and a number of stocks, cyclical these, suffered significant declines including Stellantis (-4.1%), Renault (- 3.2%) and ArcelorMittal (-3.2%).
On the other side of the Atlantic, bright red on all of the flagship indices on Monday, like the closing of the Dow Jones (-1.23% to 34,932 points), or the Nasdaq Composite (-1, 24% at 14,980 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, lost 1.14% to 4,568 points.
An update on other risky asset classes: around 8 a.m. this morning on the foreign exchange market, the single currency was trading at a level close to 1,1280$. A barrel of WTI, one of the barometers of risk appetite in financial markets, was trading around 69,50$.
To be kept on the agenda this Tuesday, as a priority, the consumer confidence index in the Euro Zone at 4:00 p.m. Across the Atlantic, the agenda won’t really get denser until Wednesday, with the Consumer Confidence Index (CB), sales of second-hand homes, final Q3 GDP data and crude stocks.
KEY GRAPHIC ELEMENTS
We did not come out of a volatile broadband phase. The resumption of an unconditional buyer’s rally has not been on the agenda since November 19. A continuation of broadband nervous oscillations should be considered. Band whose amplitude is now defined, between 6,650 and 7,185 points. Between these two bands, nervous and choppy oscillations are therefore still to be expected. The form that consolidation will take will be instructive.
PREVISION
With regard to 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 crossing 6892.00 points would rekindle the purchase tension. While a break of 6656.00 points would revive the selling pressure.
Hourly data graph
Daily data graph
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