CAC 40: Increasingly informed questions

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(News Bulletin 247) – The last session of the week will have decided the final look of the weekly candle, the closing of which is close, very close even, to the low points of the session, reminding us of the need, at this stage, for consolidation. Across the Atlantic, in the game of rotation in the universe of values, it was the tech files that benefited from support while the banking suffered sustained losses. Note that Wall Street will remain closed on Monday (Commemoration of the birth of Martin Luther King).

In terms of statistics, Friday reported retail sales, a sharp benchmark that has a place of choice on the screens of operators, as domestic consumption is THE main driver of national wealth creation in the United States. And these sales, in their monthly dynamics, were very disappointing. Excluding automobiles in December, they fell by 2.3%, completely missing the target. The federal report on industry also missed expectations, whether for December production, which contracted slightly, or for the productive capacity utilization rate, at 76.5%.

The main market drivers will remain the inflation outlook on both sides of the Atlantic, government bond yields, and the calendar of the main central banks. While the Minutes, by their tone, refreshed the atmosphere of the beginning of the year, 3 increases in federal rates seems to be an accepted scenario. The boss of JP Morgan even expects 4 increases. Jamie Dimon anticipates that inflation will remain well above the Fed’s 2% target in 2022 and is therefore banking on more than 4 rate hikes from the central bank this year, which will generate more volatility.

In terms of values ​​on the French side on Friday, it was the growth files that penalized the dynamic. Uncertainties as to the Fed’s real intentions concerning its rates therefore weigh particularly heavily on the luxury sector (down an additional 2% on Friday, Hermès brings its decline since the start of the year to more than 15%, dead last in the CAC 40) but also for technology stocks such as Eurofins (-2.7%), Dassault Systèmes (-1.4%), Teleperformance (-1.9%), etc. Kering, L’Oréal and LVMH fell by 3%, 2.4% and 2.1% respectively.

EDF collapsed (-14.59% to 8.84 euros, 7.76 euros at the low of the session) on the announcement by the French government of new measures aimed at limiting the rise in the price of electricity and the concomitant revision of the production forecast for the energy company’s nuclear fleet.

On the other side of the Atlantic, the main equity indices ended in mixed order, with a breather for tech and increased pressure on banks at the start of the quarterly ball. Finally, the Dow Jones lost Friday 0.56% to 35,911 points, while the Nasdaq Composite managed to grab 0.59% to 14,893 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, ended in balance due to the nature of its broad composition.

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 1,1420$. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around 84,30$.

To be continued on the agenda this Monday, no sharp figures are on the agenda. Already published, China’s quarterly GDP came out above expectations, at .4.0% at an annualized rate.

KEY GRAPHIC ELEMENTS

the 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 magnitude must be considered in the light of initial progress, file by file. 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. We are leaning towards the scenario of a price approach to this support level.

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

CAC 40: Increasingly informed questions (©ProRealTime.com)

Chart in daily data

CAC 40: Increasingly informed questions (©ProRealTime.com)

©2022 News Bulletin 247

Source: Tradingsat

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