(News Bulletin 247) – The CAC 40 took a breather on Monday (-0.21% to 7,082 points), preserving the 7,000 point threshold, in declining volumes, as two meetings approached major monetary markets, the outcome of the FOMC of the Fed tomorrow and the outcome of the Governing Council of the ECB on Thursday.
For Thomas Costerg, US economist at Pictet Wealth Management, the Fed will remain very sensitive to labor market data, which still shows some tension. The Fed is particularly watching the JOLTS survey of job vacancies.” Survey which will be published on Wednesday, just like the survey of the private firm ADP, two days before the publication of the monthly federal report NFP (Non Farm Payrolls), which “The Fed fears persistent wage pressures pushing up inflation, particularly in services, in 2023.”
“[Elle] could continue to raise rates, in steps of 25bp, at the next meetings until a peak of 5.25% next May, in line with the projections given in December.”, continued Mr Costberg.
“While the U.S. economy is clearly showing signs of losing momentum, with most of the growth occurring in October, we are a long way from the once-heralded collapse. Given the Fed’s monetary tightening, this is therefore rather good news. The “soft landing” scenario advocated by Jerome Powell is therefore still relevant.” Thomas Giuduci, head of bond management at Auris Gestion.
In a market note aptly titled “ECB shows who’s boss of the market,” Nomura strategists argue that a 50 basis point hike is pretty much a given. While the latest European statistical releases, in particular the German PMI and IFO, have brought relief, “the ECB will likely use this positive outlook on activity as justification to continue to tighten its policy aggressively in the short term. term, and to raise concerns about the resilience of growth that could lead to even more persistent underlying inflation,” the Japanese bank’s strategists continued.
The Fed completes its FOMC on Wednesday 01 February and the ECB its Board of Governors on Thursday 02 February.
No statistical figures of major importance came to liven up the session on Monday, at the dawn of a session that was nevertheless rich and dense on this point, with, in addition to the monetary appointments discussed, publications on American consumption, the real estate and employment. Just published, French growth in 2022 is +2.6%, very slightly above INSEE’s initial forecasts.
On the value side, Thales managed to win against the trend +1.57% to 123.20 euros, followed by Kering (+1.49% to 566 euros) which announced the arrival of Sabato De Sarno as director of the creation of the house of Gucci. Danone brings up the rear of this podium with a gain of 1.2%. On the other side of the spectrum, Renault fell 4.1% after confirming the overhaul of the alliance with its Japanese partner Nissan, with a rebalancing of cross-shareholdings as a result.
On the other side of the Atlantic, the main equity indices will have started the week in the red, like the Dow Jones (-0.77% to 33,717 points) and especially the Nasdaq Composite (-1, 96% at 11,393 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, fell 1.30% to 4,017 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 $1.0860. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $79.00.
To be followed as a priority on the macroeconomic agenda this Tuesday, the preliminary data for Q4 GDP in the Euro Zone at 11:00 a.m., and across the Atlantic: the S&P / CS index of property prices at 3:00 p.m., the CHicago PMI index at 3:45 p.m., and the Consumer Confidence Index (Conference Board) at 4:00 p.m. Find here all the economic meetings of the week.
KEY GRAPHIC ELEMENTS
Note the increase in the gap, at this stage, between the 20-day moving average (in dark blue) and its 50-day counterpart (in orange), with a marked upward bias. A basic bullish message, therefore, which may be temporarily clouded by increased temptations to take profits.
In the immediate future, the index “holds”, above 7,000 symbolic points, which serves as a basis for intermediate technical support. The drawing of a doji at this stage of the advance, after moreover a new small gap, is not synonymous with indecision, as seen above, but with simple delay within a buying trend.
Only a break in the 20-day moving average, like on December 15, would catalyze a pronounced downturn.
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 7180.00 points would revive the tension in the purchase. While a break of 7000.00 points would relaunch the selling pressure.
Hourly data chart
Chart in daily data
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