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Showing great caution, the Paris market lost – or rather its flagship index, the CAC 40 – 1.29% to 7,209 points. It is now moving away quite frankly from its peaks at 7,585 points.

Investors are naturally attentive to the latest developments on public debt. The agreement reached between Republicans and Democrats to raise the debt ceiling must still pass the caudine forks of Congress, where each camp could express its dissatisfaction with the compromise reached. The vote will take place on Wednesday in the House of Representatives, then a priori Friday or Saturday in the Senate, according to the leader of the democrats, Charles Schumer, quoted by AFP.

“Investors should first welcome the agreement that seems to have been reached between the Democrats and the Republicans in the United States, pending the vote scheduled for Wednesday. On the other hand, if this agreement is validated, the US will be able to increase the debt ceiling and will have to issue more than 1000 billion new bonds”, summarizes Vincent Boy.

In terms of statistics, the big event of Tuesday’s session was undoubtedly the consumer confidence index (Conference Board), which came out at 102.3, down less than the consensus had predicted (99.1).

On the values ​​side, we can note Valeo’s 0.77% increase at the close. The automotive supplier announced on Monday a “strategic cooperation and investment agreement” with the Chinese Didi Autonomous Driving to develop safety solutions for autonomous taxis. On the other hand, TotalEnergies lost 3.43%, undermined by the sharp drop of almost 4% in oil prices before the OPEC+ figures on production. Nexity dropped 7.83% to 19.65 euros, penalized by an analyst degradation. AlphaValue indeed lowers its recommendation to sell on the title of the real estate developer as well as its target price to 16.50 euros against 23.20 euros previously.

On the other side of the Atlantic, the main equity indices ended Tuesday’s session – the first of the week – in scattered order, the Dow Jones contracting 0.15% to 33,042 points and the Nasdaq Composite managing to grab 0.32% to 13,017 points, far from the session highs. The S&P 500, the reference barometer of risk appetite in the eyes of fund managers, ended in equilibrium at 4,205 points.

“At this stage, the markets are retaining the good news on the US debt front and that is ultimately what counts. “You always need a little paint, to save the facade” (La Rumba du brush, Bourvil). “, quips Sébastien GRASSET, AM Director of Auris Gestion.

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 $1.0690. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $69.50.

On the macroeconomic agenda this Wednesday, inflation, consumption and national wealth creation data in France at 8:45 a.m., and new job offers (JOLTS) in the United States at 4:00 p.m. An important benchmark before the ADP survey tomorrow and the monthly report on private employment on Friday.

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. Next downside target: 7,088 points, before a significant reaction of protest, with the support of files with strong Beta, on the automobile, energy or tech.

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 7356.00 points.

The News Bulletin 247 board

CAC 40
Negative
Resistance(s):
7356.00 / 7585.00 / 7740.00
Medium(s):
7015.00 / 6885.00 / 6800.00

Hourly data chart

Chart in daily data

CAC 40: Caution pending a vote on the debt ceiling (© ProRealTime.com)

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