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The CAC 40 index (+0.43% to 7,215 points) experienced a rather lackluster start to the session on Tuesday in the wake of hawkish by Christine Lagarde at the Sintra symposium, before clinging to a salvo of better-than-expected US macroeconomic indicators.
On Tuesday, the President of the European Central Bank (ECB) confirmed that her institution still had rate hikes in sight. “It is unlikely that in the near future the central bank will be able to say with confidence that the peak in rates has been reached,” she said at the ECB’s annual forum in Sintra, in Portugal.
Yesterday’s consensus overruns on US statistics – the agenda was full of them! – have been spectacularly soared, in particular for the Richmond Fed’s manufacturing index, new home sales and durable goods orders. But it is above all the consumer confidence index (Conference Board), at 109.7, which has given some comfort to a financial community that does not see the end of the monetary restriction tunnel…
“Although the Expectations Index remained a hair below the threshold signaling a coming recession, a new measure found that far fewer consumers now expect a recession in the next 12 months compared to May.” , commented Dana Peterson, chief economist at CB.
“Meanwhile, on a six-month moving average basis, auto and home purchase plans have slowed, having picked up earlier in 2023. This may reflect rising costs of financing big-ticket items as as the Fed continues to raise interest rates. Meanwhile, holiday plans over the next six months have continued to wane, largely due to lower domestic travel plans. This is an important indicator of desires to spend on future services, which may be a signal that post-pandemic “revenge spending” on travel may have peaked and is expected to slow for the remainder of This year.”
Kering (+0.7%) announced Monday evening the acquisition of Creed intended to strengthen its beauty division launched last year. This company, whose purchase amount has not been communicated, produces perfumes and is located in the very buoyant niche of hyper luxury, a segment whose annual growth is estimated at more than 15%. Trigano suffered, falling 5.2% after the publication of its activity in the third quarter, which was penalized by difficulties in vehicle deliveries to dealers as well as a poor performance in the leisure equipment division.
On the other side of the Atlantic, the main equity indices surfed the day’s statistics, and the Dow Jones gained 0.63%, much less than the Nasdaq Composite (+1.65%). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 1.15%.
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 $1.0950. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $69.10.
On the agenda this Wednesday, the trade balance of goods in the United States at 2:30 p.m., and new interventions from the world’s major fundraisers at the Sintra symposium (Portugal).
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 identified, our opinion is neutral on the CAC 40 index in the short term.
We will take care to note that a crossing of 7410.00 points would revive the tension in the purchase. While a break of 7088.00 points would relaunch the selling pressure.
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