(News Bulletin 247) – The CAC 40 index contracted by 0.20% on Wednesday, to 7,324 points, against a background of digestion of the hawksish intervention of J Powell in hearing, for two days, before the American Parliamentarians. The Chairman of the US Federal Reserve warned on Tuesday that rate hikes could be larger than expected in order to combat stubborn inflation in the United States. While specifying Wednesday that no decision on the extent of the increase in Fed Funds on March 22 was recorded.

“It’s been some time since the speeches of Jerome Powell, the chairman of the Fed, had not had a negative and immediate effect on the markets, affecting in particular risk taking”, observes Sebastian Paris Horvitz at LBPAM. “Jerome Powell’s speech seems to have consolidated the idea that monetary policy will remain restrictive beyond 2023,” he continues.

In terms of statistics, the operators are already focused on the publication, tomorrow, of the monthly federal report on employment. They will have had a taste yesterday with the publication of the private firm in resources ADP, which highlighted job creations of the order of 242,000, largely exceeding analysts’ expectations.

On the values ​​side, Casino fell 7.99% to 8.76 euros, after the announcement on Tuesday of the study of a new disposal project to “accelerate its deleveraging”, a few days before the publication of its annual results. . JP Morgan bank also downgraded its assessment of the company from neutral to underweight. The investment company Eurazeo announced a 2022 net profit down 62% over one year, a performance better than expected by analysts and to be put into perspective as the year 2021 was atypical. The action gained 5.37% to 69.60 euros.

Across the Atlantic, major equity indices ended Wednesday’s session in mixed order, with the Dow Jones contracting 0.18% to 32,798 points, and the Nasdaq Composite managing to gain 0.40 % at 11,576 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, climbed 0.14% to 3,992 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 $1.0550. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $76.70.

To follow as a priority on the macroeconomic agenda this Thursday, the weekly registrations for unemployment benefits in the United States at 2:30 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). Note the closing close to the lows of the session on Wednesday, of course, but the absence of fear at this stage. The fight against this moving average is fierce, and violent oscillations chop this flattening trend line. The option of broader consolidation takes shape at this stage.

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

CAC 40
Negative
Resistance(s):
7422.00
Medium(s):
7000.00

Hourly data chart

Graphic made from the software Prorealtime

Chart in daily data

CAC 40: Powell's hearing digested, heading for the NFP (© ProRealTime.com)
Graphic made from the software Prorealtime



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