CAC 40: New measure of tensions on American employment

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(News Bulletin 247) – The CAC 40 index (+1.26% to 7,166 points) reacted well after the conclusions of the Board of Governors of the ECB, which resulted, as expected, in an increase in its rates directors by 50 basis points. Its president Christine Lagarde said the risks to the outlook for inflation and growth had become “more balanced” since December, especially for “short-term” inflation. For the markets, the tone used by the central banker was perceived as more flexible.

“By the May 11 meeting, the ECB will have a wealth of data on inflation and wage growth. We expect inflation, overall, to continue to moderate by the meeting. of May, which, in addition to a likely material improvement in the inflation outlook at the March meeting, would support a downward revision to rate hikes in May,” Nomura strategists anticipate.

“In the end, these announcements do not contain any real surprises. On the other hand, the markets are delighted with a marginally more optimistic discourse on the current dynamics, and less categorical on the prospects for future increases”, summarizes Raphaël Thuin, Director of Strategies at capital markets at Tikehau Capital.

In terms of statistics, the continued decline in weekly registrations for unemployment benefits below 200K, to 188,000 units, continues to show the degree of tension on the job market, before the publication, this Friday at 2:30 p.m., of the monthly report federal government on private employment (NFP). Mr Powell also insisted heavily on Wednesday, at the end of the FOMC, on the state of tension in the job market, an essential barometer to watch in an inflationary period.

On the value side, Dassault Systèmes ended up sharply by 12.4% after having reassured on its results for the fourth quarter considered robust, as was its earnings forecast per share above expectations for 2023. Another satisfactory publication: that of Publicis (+5 .6%) which recorded a record activity last year. These two values ​​record the strongest increases in the CAC 40, Capgemini (+6.5%) is inserted between the two good students of the day. Still in techno, Atos (+8.1%) also stood out on the SBF 120.

Across the Atlantic, major equity indices ended Thursday’s session in mixed order, with the Dow Jones contracting 0.11% to 34,053 points, and the Nasdaq Composite jumping 3.25% at 12,200 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 1.47% to 4,179 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 $1.0900. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $76.20.

To follow as a priority on the macroeconomic agenda this Friday, the NFP report (wages, unemployment rate, job creations in the private sector), at 2:30 p.m. To follow the final data of the PMI Services in the Euro Zone, earlier in the day, at 10:00 am.

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 doji pattern at this stage of the advance (01/26, 02/1), after, moreover, a new small gap, is not synonymous with indecision, but with simple procrastination within a buying trend. the volatility observed on February 2 will have technically confirmed this.

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

CAC 40: New measure of tensions on American employment (©ProRealTime.com)

©2023 News Bulletin 247

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