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After losing more than 3% last week, the Paris market began to heal its wounds on Monday (+0.29% to 7,184 points), at the dawn of a week which will be marked by numerous American statistical indicators. major markets, including durable goods orders on Tuesday, the Conference Board consumer confidence index, a speech by J Powell on Wednesday, GDP on Thursday and PCE prices on Friday, the Fed’s favorite measure for its appreciation of price dynamics.
The markets will have had little taste of the fall, even stronger than expected, of the IFO index of the business climate in Germany, to 88.5. “The collapse of the German Ifo, as well as the drop in the PMI indices, published on Friday, suggest that German GDP probably contracted for the third consecutive quarter during the second quarter”, underlines Capital Economics.
As a reminder, the atmosphere was weighed down by the publication on Friday of a battery of PMI activity indicators in Europe. All targets are completely missed. In particular, the German industrial component stands at 41.0, the lowest since… May 2020. The services component in France, expected at 52.2, collapses to 48.
Chronic firmness of the major central banks, warnings of a marked slowdown in the economies, absence of stimulus measures in China, humiliation of Putin… The arguments which militate for the opening of the umbrella are not lacking in the trading rooms.
On the stock side, the defense sector lost attitude, Dassault Aviation lost 3.6% and Thales 2.6%, while the mutiny in Russia of the paramilitary group Wagner, finally abandoned on Saturday evening, brought to light weaknesses on the side of the Russian camp. And causes market speculation about a potential end to the conflict in Ukraine, which is perceived negatively for the sector.
On the other side of the Atlantic, the main equity indices ended the first session of the week in the red, like the Dow Jones (-0.04% to 33,714 points) or the Nasdaq Composite ( -1.16% at 13,335 points). The S&P500, benchmark barometer of risk appetite in the eyes of fund managers, lost 0.45% to 4,328 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 $1.0920. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $69.20.
On the agenda this Tuesday, to be followed as a priority across the Atlantic, durable goods orders at 2:30 p.m., the S&P Case Schiller index of real estate prices in around twenty representative cities at 3:00 p.m., the consumer confidence index (Conference Board), New Home Sales and the Richmond Fed Manufacturing Index as of 4:00 p.m.
KEY GRAPHIC ELEMENTS
The decrease in successive high points (April 24, May 19, June 16) is now characterized.
We were monitoring the gap drawn on Thursday on Friday. It was preserved at the close, with in addition a close of the weekly candle on its low points. This further degrades the short-term configuration.
A passage in weekly view suggests the beginning of an unattractive chartist figure.
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 7410.00 points.
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