CAC 40: The Omicron threat is well digested for the moment

(News Bulletin 247) – First of all, let us specify that the session of this Friday, December 24 will be shortened, with a closing at 2:00 p.m. Suffice to say that trade volumes are likely to be starving. In volumes that were already very discreet yesterday, the flagship Parisian index managed to gain 0.77% to 7,106 points, with the support of cyclical stocks, such as Société Générale (+ 1.12%), Crédit Agricole (+1 , 14%), Legrand (+ 1.15%), Axa (+ 1.15%), Saint Gobain (+ 1.43%), Renault (+ 1.52%), or Safran (+ 1.79% ).

Questions from the market remain intense on the health issue. 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. In France, and even if as he likes to remind often “nothing is excluded in principle”, the government spokesman, Gabriel Attal, does not suggest in the short term of containment measures.

In the statistical chapter, many benchmarks to report yesterday on the American side.

– the PCE price index (Personal consumption expenditures), a flagship measure for the Fed in the construction of its monetary strategy. Often preferred measure compared to the different CPIs (consumer price indices). In corrected data for food and energy (volatile elements), prices rose in November, at a monthly rate of 0.5%, beyond the consensus, according to the latest report from the Bureau of Economic Analysis.

– Expectations also exceeded on durable goods orders up 2.5% monthly, in particular thanks to the automotive sector.

– RAS on the side of household expenditure and income, which stands out perfectly in the target this month.

– finally, weekly registrations for unemployment benefits remain around 200,000 new units, continuing at an inevitably moderate rate from now on, their slow decline.

On the other side of the Atlantic, the main equity indices gained ground, like the Dow Jones (+ 0.55% to 35,950 points) or the Nasdaq Composite (+ 0.85% to 15,653 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.62% to 4,725 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 1,1330$. A barrel of WTI, one of the barometers of risk appetite in financial markets, was trading around 73,70$.

No major statistical benchmark is on the macroeconomic agenda to date.

Note for holders of RD positions: the monthly liquidation will take place at the end of the session on Tuesday, December 28.

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 anticipated. The form that consolidation will take will be instructive. Only a clear overshoot under satisfactory volume conditions of 7,185 points would definitely revive the option of a bullish extension.

PREVISION

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 crossing 7185.00 points would rekindle the purchase tension. While a break of 6785.00 points would revive the selling pressure.

Hourly data graph

Daily data graph

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