(News Bulletin 247) – The entire News Bulletin 247 analysis team wishes our community of readers and investors an excellent and fruitful year 2023. While 2022 turned on its hinges creakingly, the sources of concern for this beginning of he year remain strong, particularly in view of the explosion of Covid-19 cases in mainland China, measured by the growing fears of a return to drastic measures to close the world’s factory. It is this severe strain on supply chains in an economy that is still largely globalized, which may constitute a major brake on risk appetite at the turn of the year.
Over the whole of 2022, the CAC 40 finally lost 9.5%, its worst annual performance since 2018, when it had dropped almost 11% (10.95%). A decline that contrasts sharply with the rebound recorded last year, of nearly 29%.
Inflation barometers, particularly on the US employment front, will be scrutinized this week. The contents of the Friday monthly report (NFP for No Farm Payrolls) will provide valuable insights. The market expects the unemployment rate to stabilize at 3.7% of the active population and a slowdown in the pace of wage increases in the private sector (excluding agriculture), to +0.4% monthly.
In terms of statistics on Friday, the Chicago PMI came out sharply higher at 44.9, well above expectations. No US statistics are expected on Monday, while Wall Street will remain closed, under the new year. Here you will find all the non-working days on Wall Street in 2023.
On the stock side on Friday, industrial heavyweights and the luxury sector symbolically amplified the drop in the flagship index, like LVMH (-2.38% to 679.9 euros), Hermès (-2, 69% to 1,445 points), Eramet (-3.01% to 83.85 euros), or Michelin (-3.04% to 25,985 euros).
On the other side of the Atlantic, the main equity indices ended the last session of the year in the red, within narrow margins, like the Dow Jones (-0.22% to 33,147 points ) or the Nasdaq Composite (-0.11% to 10,466 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, fell 0.25% to 3,839 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 $1.0680. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $80.40.
To be followed as a priority on the macroeconomic agenda on Monday, a battery of industrial PMIs, in final data for December, in the Euro Zone.
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.
In the immediate future, the Wednesday 21/12 pullback must be invalidated or definitively confirmed to send any usable signal. It has so far been confirmed twice. The relative trajectories of two remarkable moving averages also send a warning signal.
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 6550.00 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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