(News Bulletin 247) – The instability of the barometer is notable on the Paris market, whose flagship index, the CAC 40, contracted by 0.38% to 7,267 points on Tuesday, in volumes once again fed, piling up, like Russian dolls, a new figure in haramiafter the ample marubozu Friday, February 24. Session which alone constituted an alert with the publication of PCE prices across the Atlantic, stronger than anticipated by the financial community.
The strategists of DNCA Finance summarize, in the light of this inflation, their view of the market: “Swaps on FED rates are adjusting upwards: up to 5.3% expected in July, more than 60 basis points above the Bank’s effective rate Loretta Mester (Cleveland FED) openly supports a further 50 basis point hike The chances of a first FED rate cut at the end of the year are receding Schnabel (ECB) thinks that the markets are too complacent with inflation.”
In terms of statistics yesterday, note the publication of the highly monitored American consumer confidence index (Conference Board), in surprise contraction to 102.9.
Inflation figures in France do not show any appeasement on the price trend front. The harmonized consumer price index in France increased by 7.2% over one year in February against 7% in January.
“It will be necessary to wait for the summer to see inflation ebb”, for Charlotte de Montpellier, economist at ING. “Ultimately, the February data indicate that French inflation has still not peaked. Both headline and core inflation are likely to continue to rise in the coming months, providing additional arguments to the ECB to continue raising rates beyond the first quarter.”
On the values side, Worldline ended up 2.38% at 39.52 euros thanks to a “reco” from Morgan Stanley. Red lantern of the CAC 40, Eurofins Scientific lost 3.8% on the eve of the publication of its annual results. Excluding the star index, Casino lost 3.6% after reporting deleterious sales in France in the fourth quarter, particularly in its supermarkets.
On the other side of the Atlantic, the main equity indices contracted slightly on Tuesday, like the Dow Jones (-0.71% to 32,656 points) or the Nasdaq Composite (-0.10% to 11,455 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, fell 0.30% to 3,970 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 $1.0610. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $77.60.
To be followed as a priority on the macroeconomic agenda this Wednesday, a battery of PMI activity indicators (surveys of purchasing managers) throughout the morning, in final data for February, as well as the American ISM services at 4 p.m.
KEY GRAPHIC ELEMENTS
The bearish engulfing sequence in powerful volumes and harami in much more discreet volumes, in the upper part of the bullish momentum movement, releases a short-term bearish potential, a potential that would only gain momentum in the event of a break in the moving average at 50 days (in orange) by its sister at 20 days (in dark blue).
FORECAST
In view of the key graphic factors that we have mentioned, our opinion is negative on the CAC 40 index in the short term.
This bearish scenario is valid as long as the CAC 40 index is trading below the resistance at 7422.00 points.
The News Bulletin 247 board
Hourly data chart
Chart in daily data
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