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The CAC 40 will have on Wednesday, within narrow margins, continued the beginning of a movement of consolidation of the recent advance, contracting by 0.39% to 7,316 points / A movement which was accentuated shortly after the opening of Wall Street where operators had to deal with indicators suggesting fears about growth. It was, however, in a sense, the avowed aim of a firm monetary policy, namely: to avoid the runaway of the economic machine…
“As the risks of an impending banking crisis have dissipated, fears about growth momentum, particularly in the United States, have continued to gain ground, all the more so with the new rise in the price of oil”, underline the economists of La Banque Postale Asset Management, for whom “the risk of recession seems to be gaining ground”.
In fact, in terms of statistics, the operators have taken note of the conclusions of the survey by the private human resources firm ADP, which highlights the creation of jobs (148,000) much less important than the consensus would suggest. As for the “Jolts” data published Monday afternoon, they showed a sharp decline in job openings in the country over the month of February. Moreover, the ISM leading activity indicator for services contracted sharply to 51.2, taking the financial community on the wrong foot.
In terms of values, securities with a strong current Beta effect lost a lot of ground on Wednesday, particularly in the automotive equipment sector and in industry in general. Valeo ended with a loss of 3.46% to 18.12 euros and Faurecia, the red lantern in compartment A of the rating, 7.29% to 18.74 euros. Files very sensitive to the economic situation, such as Saint Gobain (-4.52% to 49.38 euros), Legrand (-4.55% to 78.94 euros), Rexel (-6.72% to 19.85 euros ), and Nexans (-7.08% to 82.05 euros), suffered. Conversely, Sodexo soared by 11.3%, exceeding the psychological threshold of 100 euros, after announcements deemed favorable, including the desire to list, separately, its meal vouchers division.
Across the Atlantic, major equity indices ended Wednesday’s session in mixed order, with the Dow Jones managing to climb 0.24% to 33,482 and the Nasdaq Composite contracting 1.07% to 11,996 stitches. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, lost 0.25% to 4,090 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 $1.0890. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $79.90.
To follow as a priority on the macroeconomic agenda this Thursday, the weekly registrations for unemployment benefits at 2:30 p.m. It should be noted that the Paris Stock Exchange will close its doors this evening, to reopen Tuesday morning, offering two respite sessions (Good Friday and Easter Monday) to operators.
KEY GRAPHIC ELEMENTS
Beneath its historic highs, the flagship Parisian index “holds”, under a resistance zone that is asserting itself. In the immediate future, the entry into a phase of consolidation of the recent and lively progress is recorded. A work band is designated: between the gap of March 30 (lower limit at 7,201 points, and the historic highs at 7,401 points, i.e. a domain of 200 points. The structure, the pace, and the dynamics of volumes within this consolidation movement will be rich in lessons for the subsequent debates between buyers and sellers.
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.
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