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The ACC fell 1.70% to 7,253 points yesterday, while negotiations between the Biden administration and the Republican camp in Congress remain infertile, each party denouncing the other for supporting budget proposals that are too radical.
In this context, the rating agency Fitch has placed the US triple A rating under review.
Remember that the US Treasury estimates that the default of payment by the United States could occur as early as June 1. The Democratic executive has, moreover, ruled out resorting to a forced passage by invoking the 14th amendment to the Constitution. The clock is therefore ticking and anxiety is mounting for the markets, which are posting a third session of decline.
“In the absence of a real deal and the closer we get to June 1, the greater the fears of default become, given that the risk remains the highest since 2011 and is one of the most visible risks. which could certainly plunge the American economy,” said Stephen Innes of SPI Asset Management.
In the macroeconomic chapter, the latest figures may suggest an upcoming contraction of the economy in the Euro Zone. The disappointment of the German industrial PMI, published the day before yesterday as first estimates for the current month, at 42.9 well below expectations, is a perfect illustration of this. This morning was published the IFO business climate index in Germany, the leading economy in the monetary union. The indicator is down to 91.7, also missing the consensus. “This is the first decline after six consecutive increases. A much more pessimistic outlook is behind this development. Managers are somewhat less satisfied with their current situation. German companies are skeptical about the summer next”, can we read in the press release accompanying the results of the investigation of the German institute.
On the values ​​side, note that on Wednesday, other sectors joined luxury to participate in the decline, the automobile, technology in particular. Thus, Renault lost 2.82% to 32.74 euros, Stellantis 4.09% to 14.62 euros. Teleperformance contracted by 2.50% to 156.20 euros, Cap Gemini by 2.55% to 158.6 euros, and Wordline by 3.45% to 39.21 euros. Automotive suppliers suffered, with a traditional Beta effect (amplification), like Valeo (-2.83%), Faurecia (-5.65%) and Michelin (-2.37%).
On the other side of the Atlantic, the main equity indices closed in red territory like the Dow Jones (-0.77% to 32,799 points) and the Nasdaq Composite (-0.61% to 12 484 dots). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, fell 0.73% to 4,115 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 $1.0730. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $73.90.
To follow as a priority on the macroeconomic agenda this Thursday, across the Atlantic, the preliminary data of GDP and the weekly registrations for unemployment benefits, at 2:30 p.m.
KEY GRAPHIC ELEMENTS
We placed the 7,310 point threshold under close surveillance, which was pushed down, on a wide gap, in high volatility, and in a rising volume level. A short reaction took place at the end of the session from the upper limit of the thin gap of March 30 which remains threatened. Next downside target: 7,088 points, before a protest reaction.
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 7585.00 points.
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I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
