(News Bulletin 247) – The CAC 40 index ended in symbolic decline on Wednesday (-0.13% to 7,299 points), a good distance from its session low points, equities, in particular growth stocks sensitive to the monetary issue, making resistance to the approach of the publication of the Minutes of the Fed (8:00 p.m., well after the close), therefore.

This report of the last monetary policy meeting of the powerful monetary institution headed by J Powell is in line with expectations, namely those of a balance of power between hawkish and dovish, of a confirmation of the will to want to fight against chronic inflation. While being aware that in the interval, between the FOMC and the publication of the Minutes, many publications showing an overheating of the American economic machine have multiplied, in particular on employment.

James Bullard, the president of the St Louis Fed declared for his part on CNBC on Wednesday that he was in favor of a hike in federal rates to 5.375%, which would imply an increase of 0.75 percentage points to reach “the level rate terminal” capable of containing inflation.

Yesterday in terms of statistics, the IFO business climate index in Germany came out at 91.1, a very slight increase, perfectly within target (the consensus).

In terms of values, Danone pulled out of the game, finishing at the top of the CAC 40 (+4.49% to 54.66 euros) thanks to results that exceeded expectations. Same observation at Stellantis which gained 2.2% with still impressive margins, although slightly down in the second half. Conversely, Korian collapsed by 19.9% ​​weighed down by plummeting profitability in 2022 and disappointing prospects due to exceptional costs intended to modernize and diversify its network of retirement homes. Finally, the pan-European stock market operator Euronext was also penalized (-7.4%) after confirming its expressions of interest for the Spanish company Allfunds, which specializes in fund distribution.

On the other side of the Atlantic, the main equity indices ended in scattered order, close to balance, like the Dow Jones (-0.26% to 33,045 points) or the Nasdaq Composite ( +0.13% to 11,507 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, fell 0.16% to 3,991 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 $1.0620. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around 74.00$.

To be followed in priority on the macroeconomic agenda this Wednesday, the consumer price indices in the Euro Zone at 10:00 a.m. and the preliminary data for the American GDP in Q4 at 2:30 p.m.

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 traced candle, formally in marubozu near perfect, coupled 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.

The News Bulletin 247 board

CAC 40
Neutral
Resistance(s):
7422.00 / 7740.00
Medium(s):
7000.00 / 6760.00

Hourly data chart

Graphic made from the software Prorealtime

Chart in daily data

CAC 40: The Minutes do not change the balance of power (© ProRealTime.com)
Graphic made from the software Prorealtime



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