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First of all, it should be noted that despite the holiday nature of this Monday (Pentecost), the Paris market will be open, under the usual conditions of timetables and quotation. We should naturally expect a very limited level of participation, due to the absence of a large fringe of investors, and without benchmarks from Wall Street, which for its part will remain closed.
Friday, the CAC 40 index resumed colors, thanks to luxury and the automobile, on a background of hope on the American debt. Finally, an agreement in principle has just been reached this weekend between Joe Biden and the leader of the opposition, the Republican McCarthy. A necessarily imperfect agreement, which has the counterpart of significant budget cuts. There are now a handful of days left to vote on the text in both Chambers.
Renault gained 2.20%, Hermès 2.32% and LVMH 2.44%.
Casino Guichard lost 6.43% (-17% since the beginning of the month), while the distribution group is currently in full negotiations with its creditors.
In terms of statistics, investors have relegated to the background the publication of income and consumer spending figures for the month of April, including those of the PCE index, the preferred gauge of the United States Federal Reserve (Fed) to measure inflation. This indicator increased by 4.4% over one year against 4.2% the previous month. The underlying “core PCE” index, which excludes volatile data such as food and energy, accelerated to 4.7% year on year from 4.6% the previous month. For their part, US household spending rose more than expected, by 0.8% in April, while their incomes also rose (+0.4%).
Jeanne Asseraf-Bitton, Head of Research and Strategy at BFT IM identifies a loss of momentum in France: “The contraction in real retail sales is worsening to -6.8% year on year in April against a backdrop of still deteriorating confidence. The business climate in May suggests stagnation of activity except for construction in expansion and industry in recession.”
On the other side of the Atlantic, the main equity indices gained ground on Friday, like the Dow Jones (+1% to 33,093 points), but especially the Nasdaq Composite (+2.19% to 12,975 points). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 1.30% to 4,205 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 $1.0740. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $73.00.
On the macroeconomic agenda on Monday, no indicator to follow. Tomorrow’s agenda will become denser with, in particular, the highly monitored American consumer confidence indicator (Conference Board).
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, a level which remains threatened. Next downside target: 7,088 points, before a protest reaction.
Beware of the commitment of a combination in three crows, which would be validated in the event of opening above 7,229 points, and closing below.
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 7400.00 points would revive the tension in the purchase. While a break of 7234.00 points would relaunch the selling pressure.
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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.
