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Within narrow margins, pending numerous quarterly copies, the French market showed resistance on Monday, below its all-time highs. “The financial markets have returned to the “mood” of the inflation / growth / central banks triptych while waiting for the results season to be in full swing”, summarizes Thomas Giudici, head of bond management at Auris Gestion.
On the microeconomic side, the markets are going “into the hard”, with today’s publications from Alphabet and Microsoft. At the same time, traders remain tormented by the Fed’s short-term strategy. Will it take a break at the end of the next FOMC next month, a way of recording the confirmation of a slowdown in inflation, or will it maintain a firm course for a few more months at the risk of weighing more on a weakened economy?
“While monetary tightening is undeniably close to an end, economic data continues to show signs of resilience,” notes the manager. “While economies are nonetheless slowing, this is forcing central bankers to play a balancing act and the divergences among members, both in the US and in the eurozone, are growing. However, as Jerome Powell has repeatedly reminded us, central bankers prefer to make mistakes by increasing too much, at the risk of slowing the economy more brutally, than to stop monetary tightening prematurely.
In terms of statistics, the operators took note of the IFO index of the business climate in Germany, the leading economic power in the Euro Zone. The indicator rose slightly, in line with market consensus, to 93.6. In the manufacturing sector alone, the index rose somewhat. On the one hand, optimism surrounding the outlook has increased significantly. On the other hand, companies rated their current activity as significantly low. Production is expected to increase in the coming months. Capacity utilization increased slightly from 84.3% to 84.5%; it remains above its long-term average of 83.6%.
On the value side, LVMH (+0.1%) recorded a new historic peak in session at 904.60 euros, allowing it to exceed 500 billion dollars in capitalization, a first for a European company. Biggest rise in the SBF 120, Getlink (+4.2%) benefited from an increase in recommendation from Goldman Sachs, which went to “buy” against “neutral” previously. On the other hand, Orpea fell by 11.2%, while its board of directors refused to hold a general meeting, thus dismissing a request from minority shareholders who wanted to express their dissatisfaction with the heavy restructuring of the company. Casino lost 1.6% while the Czech businessman, Daniel Kretinsky, submitted a proposal with the project of a capital increase of 1.1 billion euros to bail out the distribution group (including 750 million by his own company).
On the other side of the Atlantic, the main equity indices ended in scattered order, at levels however close to balance, and the image of the Dow Jones (+0.20% to 33,875 points) and of the Nasdaq Composite (-0.29% to 12,037 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, nibbling 0.09% to 4,137 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 $1,1050. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $78.20.
To follow as a priority on the macroeconomic agenda this Tuesday, 3 American meetings at 4:00 p.m.: the consumer confidence index (Conference Board), sales of new homes and the manufacturing index of the Richmond Fed. Find the full economic calendar here.
KEY GRAPHIC ELEMENTS
After a “crazy” week (W15), marked by the tracing of a long white weekly candle, of which a good part of the body is made up of successive historical peaks, the time has come for the consolidation of the advance, even if the underlying bullish message remains intact, as shown by the reconquest of the 50-day moving average (in orange) by its 20-day counterpart (in dark blue). Just like the pursuit gaps visible on the hourly chart. In the immediate future, a continuation of a healthy flat consolidation phase is envisaged. An encouraging sign, the ability, while consolidating, of the index to end on the weekly highs in week 16.
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 7740.00 points would revive the tension in the purchase. While a break of 7234.00 points would relaunch the selling pressure.
The News Bulletin 247 board
Hourly data chart
Chart in daily data
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