(News Bulletin 247) – At the end of a once again volatile session, the CAC 40 lost 0.37% to 7,308 points on Tuesday, halted in its tracks by the rate dynamics, an expression of the prospect of a maintenance of a relatively firm monetary policy, in particular by the Fed. 10-year Treasuries are now approaching the symbolic threshold of 4%.
“Proponents of the ‘persistent inflation’ scenario cited the strength of the labor market, easing financial conditions and the V-shaped rebound in Chinese economic growth. To support the thesis of the persistence of inflation, the other set of data to be released was the January Purchase Price Indices (PPIs), which together are considered a leading indicator of future consumer prices.” of the weekly market of Muzinich & Co.
The latest economic data published on both sides of the Atlantic leaves the way open for central banks to continue their interest rate hikes.
As a reminder on Thursday, the producer price indices for the month of January in the United States, well above expectations (+0.7%), as are the weekly registrations for unemployment benefits, below 200,000 new units , have once again shown, as leading inflation indicators, the strains on the economic machine. A new reminder for the Fed that maintaining a firm monetary policy throughout 2023 will be essential.
In terms of statistics on Tuesday, a battery of PMIs was published, below expectations for industry and above for services, for synthetic data for the monetary union. The ZEW index of confidence in the German economy, at 28.1, for its part largely exceeded the target. ZEW Chairman Prof. Achim Wambach made the following comments alongside the raw survey data: “A large proportion of survey participants expect the economic situation to improve in the next six months. However, the current situation is still rated relatively unfavourable.As in the previous month, the rise in expectations can be attributed to higher earnings expectations in the energy and export sectors as well as in the consumption-related economy. Expectations for long-term interest rates are also rising and the banking sector indicator has reached its highest level since 2004.”
On the stock side, sensitive to the direction of interest rates, tech stocks suffered particularly on Tuesday. On the CAC 40, Worldline lost 3.86% to 39.57 euros after publishing disappointing margin forecasts, Capgemini lost 2.8% despite results deemed convincing by analysts. Excluding the CAC 40, Atos returned 5.8%, while the TCI fund is headwind against Airbus taking a stake in a future Atos subsidiary. Sopra Steria, for its part, gave back 2.1%. Going against the trend, Engie finished at the top of the CAC 40 (+4.8%) after publishing annual accounts that exceeded expectations, driven by gas and electricity prices.
On the other side of the Atlantic, the main equity indices started their week in (bright) red on the back of interest rate pressures. The Dow Jones lost 2.06% to 33,129 points and the Nasdaq Composite 2.50% to 11,492 points. The S&P 500, the reference barometer of risk appetite in the eyes of fund managers, fell 2% all round, closing symbolically just below the 4,000 point threshold.
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 $1.0660. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $76.90.
To follow in priority on the macroeconomic agenda this Wednesday, the Minutes of the Fed at 8:00 p.m., traditional chronological account of the debates of the last FOMC of the Fed.
KEY GRAPHIC ELEMENTS
In rising volumes if not particularly fed, the CAC 40 ended up significantly on Wednesday 02/15, offering itself the luxury of closing at a level very close to the high points of the session. The candle drawn, formally in near-perfect marubozu, lined with an engulfing combination, reinforced the underlying bullish message. The next day in session, new historic records were broken. A serene consolidation can take place, even against the 20-day moving average (in dark blue), whose orientation remains bullish.
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.
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Hourly data chart
Chart in daily data
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I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
