CAC 40: The directional is not yet decided, the nervousness remains intense

(News Bulletin 247) – The CAC 40 (+ 1.38% to 6,964 points) moved forward on Tuesday, however failing to regain the 7,000 points. However, the air gap crossed at the start of the week seems to have passed. Is it finally the truce (of the confectioners)? It will obviously be necessary to continue to remain on guard, in a hypersensitive stock market environment, as revealed two major files: Omicron and the Manchin case.

In the health chapter, 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 weighs down 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 for the final not of Senator Joe Manchin as to his vote on the law to finance the BBB plan, cornerstone of Joe Biden’s mandate, here is a brief reminder of the facts: only one Senator, (Democratic camp, from West Virginia) Joe Manchin , blocks the vote on the BBB (Build Back Better) plan, a plan of more than $ 1,700 billion which includes major social and environmental aid and investments. It is “following this announcement” that “Goldman Sachs has decided to reduce its growth prospects 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 “, noted Vincent Boy.

This no is “definitive”, announced Joe Manchin on television … He thus alone blocks the vote, the Democrats not reaching the majority for this one. Indeed, 50 seats out of 100 are currently occupied by Republicans in the Senate. By counting the vote of Kamala Harris (Vice-President of the United States and President of the Senate according to the Constitution), the Democrats gather 50 votes … Except that Kamala Harris has the right to vote, only to decide in case of equality!

Joe Manchin’s firm NO to Joe Biden BBB reform plan is an extremely important political setback. First of all it was indeed a strong campaign pledge from the current president. Democrats are divided on whether to use public funds in the face of abysmal US debt. Finally, it could also question the Fed’s monetary decisions in the face of declining growth, a resurgence of Covid cases and a potential stabilization of inflation “, summarizes John Plassard (Mirabaud).

In terms of statistics, the consumer confidence index in the Euro Zone as defined by Eurostat came out perfectly in line with expectations. The calendar is clearly denser today (see below).

In terms of values, the Bolloré galaxy stood out on Tuesday following the proposed sale to the Italian-Swiss shipowner MSC of the group’s logistics activities in Africa, on the basis of an enterprise value of 5.7 billion euros. The Bolloré share proper rose 11.5% while its main shareholder Financière de l’Odet even soared by 17.2%, a sign that some investors are betting on a more radical overhaul of the holding system which is until now. here is the group’s trademark. Vivendi, Bolloré’s main subsidiary, was not to be outdone, gaining 4.5%, one of the best performances of the CAC.

On the other side of the Atlantic, the main equity indices have gained altitude, like the Dow Jones (+ 1.60% to 35,492 points) or the Nasdaq Composite (+ 2.40% at 15,341 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 1.78% to 4,649 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 1,1270$. A barrel of WTI, one of the barometers of risk appetite in financial markets, was trading around 71,20$.

To be continued on the agenda this Wednesday, on the American side, the final GDP data for Q3 at 2:30 p.m., the consumer confidence index (Conference Board) and sales of second-hand homes at 4:00 p.m., as well as crude stocks at 4.30 p.m.

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 7185.00 points would rekindle the purchase tension. While a break of 6656.00 points would revive the selling pressure.

Hourly data graph

Daily data graph

©2021 News Bulletin 247