CAC 40: Ms. Lagarde should maintain a tough tone

(News Bulletin 247) – The CAC 40, frozen yesterday, is expected in the green this Thursday, the day after the Fed’s FOMC issue. Monetary policy meeting which ended, unsurprisingly, with a 25 bp increase in Fed Funds. The tone used in the press conference will have been a little more flexible than expected, revitalizing the technological side of the rating. The Nasdaq Composite will once again have gained more than 2%.

It is the turn of the European Central Bank this Thursday to complete its Board of Governors. “After the November and December meetings which gave a negative feeling of inconsistency in the discourse, Emmanuel Auboyneau (Amplegest) [espère] that the European Central Bank will be clearer in its analysis and in its outlook. An increase in key rates of 50 basis points is almost recorded but Ms. Lagarde is expected at the turn on her inflation forecasts and on the indications she will give for the March meeting. It should maintain a tough tone until we have more tangible evidence of a decline in the underlying part of inflation.”

Yesterday in terms of statistics, if the job news (JOLTS) once again exceeded expectations, the ADP firm’s survey showed a very clear decline in job creations in the private sector. Verdict tomorrow with the NFP report, monthly federal report on employment, whose state of tensions is scrutinized in inflationary periods.

Eramet jumped 13.88% to 104.20 euros carried by Oddo BHF, which raised its board to “outperformance” against “neutral” previously. Bonduelle appreciated by 4.4% after an increase in half-year sales, driven by price increases in Europe, but displayed its caution for the rest of its financial year. Casino gained 1.9%. According to Bloomberg, the Saint-Etienne group could combine its activities with those of Teract, which includes Jardiland, Gamm vert and Boulangerie Louise among its brands. Orpea had a volatile session to end down sharply by 22.2% as an agreement in principle was reached to restructure the finances at half mast of the operator of retirement homes. But this agreement will be synonymous with heavy dilution for shareholders.

On the other side of the Atlantic, there is a major sectoral and factorial gap to report, in favor of growth technologies. While the Dow Jones ended on a flat note, the Nasdaq Composite made hearty gains of more than 2% to 11,816 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 1.05% to 4,119 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 $1,1000. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $77.20.

To follow as a priority on the macroeconomic agenda this Thursday, the weekly registrations for unemployment benefits in the United States at 2:30 p.m. The ECB’s monetary policy decision is expected at 2:15 p.m. and the press conference at 2:45 p.m.

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.

Positive review offered.

FORECAST

In view of the key graphic factors that we have mentioned, our opinion is positive on the CAC 40 index in the short term.

This bullish scenario is valid as long as the CAC 40 index quotes above the support at 7000.00 points.

Hourly data chart

Chart in daily data

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