CAC 40: Powell to the rescue before the publication of inflation

(News Bulletin 247) – Against a backdrop of palpable nervousness, the CAC 40 index managed to gain 0.95% to 7,183 points on Tuesday, tracing a doji perfect, whose amplitude is included in that of the marubozu black drawn the day before. A careful wait-and-see policy, therefore, on the eve of the publication of US inflation figures. Figures that will complete the Minutes – NFP – CPI triptych, which defines the degree of firmness to come from the Fed. In the immediate future, the net ebb of Treasuries 10 years relieved Wall Street. Dropping sharply from around 1.78 to around 1.73, the yield on US government bonds LT allowed for an upward aspiration in growth records.

As during each mini-correction, the markets were still able to count on Tuesday on the support of the influential boss of the Fed, Jerome Powell, questioned this Tuesday afternoon by the Senate on the institution’s strategy to combat the inflation in the United States. To the rescue, the strongman of the US central bank “vowed to do everything possible” during his second term to fight rising consumer prices, as the CPI index rose at a rapid pace. unprecedented in nearly 40 years in November, at + 6.8% over one year, according to figures from the Bureau of Labor Statistics – very far from the target of 2% considered healthy by the Fed for the economy, but slightly lower than analysts’ expectations who were betting on an increase of 7% year-on-year.

In terms of statistics, sharp benchmarks were lacking on Tuesday. Back in force this Wednesday. To follow on the agenda this Wednesday, as a priority, the consumer price index in the United States at 2:30 p.m. At the end of the morning at 11:00 a.m., operators will be informed of the latest figures for industrial production in the Euro Zone.

In terms of values, Technip Energies (+5.95% to 13.985 euros) was highly sought after, shareholders rejoicing in TechnipFMC’s delisting. Ubisoft (+4.54% to 44.72 euros), or Alten (+3.71% to 151.0 euros), were also popular on Tuesday.

On the other side of the Atlantic, the main equity indices resumed their colors (green in this case), the Nasdaq Composite in particular (+1.41% to 15,153 points) benefiting from the lull in the long rates. The Dow Jones, rich in banking and generally in Value files, only rose 0.51% to 36,252 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.92% to 4,713 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 1,1360$. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around 81,20$.

KEY GRAPHIC ELEMENTS

The underlying trend is not threatened at this stage, but it is clear that the losses on Wall Street last week had repercussions in Paris, in the form of one-off and targeted profits in Paris, profit taking whose extent must be considered in the light of initial progress, dossier by dossier. All the same, we remain well above a bullish slant and the 100-day moving average (in orange), benchmarks which gradually tend to merge, and which will therefore gain in technical significance.

PREVISION

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 7390.00 points would revive the tension in the purchase. While a break of 7000.00 points would relaunch the selling pressure.

Hourly data chart

Chart in daily data

©2022 News Bulletin 247