CAC 40: Cap maintained

(News Bulletin 247) – Without relying on a substantiated scientific analysis, the markets are federating around the idea that Omicron, by its less dangerousness, would not be able to slow down the economic recovery. And if he could contribute, by his exceptional contagiousness, to achieving the famous collective immunity … This is in substance the feeling that emerges from this beginning of the year on the Parisian market, including the flagship index, the CAC 40, gained 1.39% to 7,317 points, in volumes up sharply.

“The rapid spread of Omicron in December led to a surge in the number of cases [de Covid]. But while hospitalizations have certainly increased last month, the use of oxygenation devices has hardly increased so far. If the decrease in dangerousness is confirmed in the coming weeks, the threshold before imposing new restrictions will remain high in our opinion, “note analysts at Barclays.

It was the Value files, linked to tourism, air travel, and financials, which drove the market higher on Tuesday. These include Accor (+ 3.96% to 30.44 euros), Rexel (+ 4.41% to 18.95 euros), Société Générale (+ 4.83% to 31.925 euros), or even Air France (+8, 13% to 4.39 euros).

In the macroeconomic chapter, yesterday, two disappointments in the sense of the deviation from the consensus, concerning the ISM manufacturing index, at 58.7, in sharp contraction, and the new job offers (JOLTS), which missed expectations. What to direct the magnifying glass to the ADP investigation which will be published this afternoon, before the federal NFP report on Friday.

On the other side of the Atlantic, a beginning of effervescence on the interest rate market caused differences in performance between the indices, the Dow Jones, rich in banking in particular, managing to grab 0.59% to 36,799 points , and the Nasdaq Composite, rich in growth records, contracting 1.33% to 15,622 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, ended the session balanced at 4,793 points.

An update on other risky asset classes: around 8 a.m. this morning on the foreign exchange market, the single currency was trading at a level close to 1,1300$. A barrel of WTI, one of the barometers of risk appetite in financial markets, was trading around 77,00$.

To be kept on the agenda this Tuesday as a priority the PMI (IHS) for services in the Euro Zone, in final data at 10.00 a.m., and for the United States, the results of the ADP survey on employment at 2.15 p.m., the oil stocks at 4:30 p.m. and the Fed Minutes at 8:00 p.m.

KEY GRAPHIC ELEMENTS

The CAC index is now in the high part (at the extremum) of its very broad consolidation phase which takes place between 6,650 and 7,200 points. The underlying trend remains strongly bullish and as long as no reversal pattern is validated, this trend will remain the preferred working basis. In the immediate term, caution is required. A clear overshoot, in powerful volumes and sustained volatility, of 7,200 points would signal the start of an additional bullish wave. A wave that would then be appreciated in terms of the volumes and the quality of the sectoral federation. If the conditions were not met on Monday, they were on Tuesday.

PREVISION

In view of the key graphic factors that we have mentioned, our opinion is positive on the CAC 40 index in the short term.

This bullish scenario is valid as long as the CAC 40 index is quoting above the support at 7160.00 points.

Hourly data graph

Daily data graph

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