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Friday, January 27, 2023
HomeMarketsCAC 40: Last session of a turbulent stock market year

CAC 40: Last session of a turbulent stock market year

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(News Bulletin 247) – Decidedly, this last straight line of the year looks like a way of the cross for the CAC 40 index, which painfully oscillates around 6,550 points, under the pressure of the explosion of case of Covid-19 in China. Operators are keeping a close eye on the explosion in the number of cases in mainland China, in the light of 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. On Thursday, however, the flagship Paris index managed to climb 0.97% to 6,573 points, in the wake of a reaction on Wall Street, fueled largely by tech stars.

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On the statistical side, the publication of weekly registrations for unemployment benefits, perfectly in line with expectations, at 225,000, in reality only confirmed the tense state of the job market on the other side of the Atlantic. The increase in these new listings is slight, and above all, the market was prepared for it.

On the securities side, health and in particular groups offering Covid-19 tests have benefited from concerns related to the pandemic. Eurofins signed the largest increase in the CAC 40 with an increase of 3.09% to 68.64 euros. Ipsen gained 4% and bioMérieux gained 3.3%.

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On the other side of the Atlantic, the main equity indices rose on Thursday, in widely varying proportions: while the Dow Jones gained 1.05% to 33,200 points, the Nasdaq Composite rebounded 2.59% at 10,478 points. The S&P 500, the benchmark risk appetite barometer, gained 1.75% to 3,849 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 $1.0650. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $77.50.

To be followed as a priority on the macroeconomic agenda this Friday, the Chicago PMI index at 3:45 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.

Immediately, the pullback Wednesday 12/21 must be reversed 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 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

CAC 40: Last session of a hectic stock market year (© ProRealTime.com)

©2023 News Bulletin 247

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