CAC 40: Not so easy to digest US employment figures

(News Bulletin 247) – J. Powell insisted heavily on this last Wednesday at the end of the first FOMC of the year: tensions on employment remain worrying! And this essential barometer to monitor in inflationary periods, rhythm, by its appointments, the calendar of operators (JOLTS, registrations for unemployment benefits, ADP surveys, NFP). It is the latter, the NFP (for Non Farm Payrolls), which was published on Friday, at the statistical high point of the session. This is the monthly federal report for the month of January, in the private sector. And it is clear that the figures, except for the dynamics of wages, deviate considerably from expectations.

In detail, the private sector would have created nearly 520,000 jobs in the first month of the year, against 260,000 in December, and the unemployment rate, expected to rise very slightly to 3.6%, came out down. to 3.4% of the working population. Enough to prove J Powell right, in his warning this week. However, the moderation in wage increases is welcomed with relief. This runaway job creation, coexisting with a very low unemployment rate, casts doubt on a future acceleration in wage increases. It was the threat of a price/wage spiral, which the Fed cannot yet formally rule out, which caused 10-year Treasuries to heat up on Friday, weighing in particular on growth records.

On this side of the Atlantic, the main equity indices ended Friday’s session on dissonant notes, with the DAX contracting 0.21% to 15,476 points, and the CAC 40 managing to gain 0.94 % at 7,233 points, thanks in particular to the baroque coupling between luxury, defensive and Value. Star of the day, Publicis gained another 6%, benefiting from an increase in recommendation from Barclays to “overweight” after its solid annual results unveiled on Thursday.

On the other side of the Atlantic, the main equity indices ended Friday’s session in the red, albeit within very different margins, with the Dow Jones contracting slightly by 0.38% to 33,926 points, and the Nasdaq Composite falling much more significantly, from 1.59% to 12,006 points. The S&P500, benchmark barometer of risk appetite in the eyes of fund managers, lost 1.04% to 4,136 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 $1.0790. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $73.80.

To follow as a priority on the macroeconomic agenda this Monday, the Sentix index of investor confidence in the Euro Zone 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 a further small gap, is not synonymous with indecision, but with simple procrastination within a buying trend. The volatility observed on February 2 and 3 will have technically confirmed this. Nevertheless, at this stage, the option of a pullback is far from being ruled out.

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 7422.00 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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