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The weeks go by and… are not alike for the CAC40! The three-color flagship index fell by nearly 4% in week 27 after gaining 3.30% in week 26. Operators, feverish, are becoming aware of the concomitance, for the next few months, of a brake on the major economies in the world, and the continuation of restrictive monetary policies. The flagship tricolor index nevertheless managed to stop the bleeding on Friday (+0.42% to 7,111 points) in the wake of the publication of the federal employment report. The NFP (Non Farm Payrolls) will ultimately have been less terrible than the thunderclap suffered the day before with the investigation by the ADP firm.

The report highlights job creations in the private sector (excluding agriculture) of around 210,000 units, below the target of 224,000, as well as a stabilization of the unemployment rate at 3.6% of the active population. So much for the “phew of relief”. On the other hand, it should be noted that the dynamics of wages (+0.4% on a monthly basis) exceeded expectations, and should mechanically fuel the debates towards maintaining monetary firmness at the next FOMC. Not enough, therefore, to influence the Fed in its decision to raise Fed Funds by 25 bps at the end of the month. A probable scenario up to 92.4% according to the CME Group’s FedWatch tool.

In terms of values ​​on the Paris Stock Exchange, SES-imagotag rebounded 31.60% on Friday despite the new projection of Gotham City Research, the short seller, which published the second part of its report at vitriol against the company. But the market was probably expecting more frank and concrete attacks, while this second volume does not provide any really brutal additional elements. Airbus recovered 1.3% after reporting 72 aircraft deliveries in June, a marked increase in the pace, which lends credibility to its target of 720 aircraft delivered for the whole of 2023. Finally, the defensive were shunned, like the CAC of Air Liquide (-0.17%), Danone (-0.50%), Pernod-Ricard (-0.66%), Sanofi -1.14%) or L’Oreal (-1.34%)

On the other side of the Atlantic, it is time for consolidation on the main equity indices. The Dow Jones ended the week Friday down 0.55% and the tech-heavy Nasdaq Composite 0.13%. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, fell 0.29%.

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 $73.20.

On the agenda this Monday, to follow the Sentix index of investor confidence in the Euro Zone at 10:30 am, as well as the stocks of American wholesalers, in final data for the month of May at 4:00 pm.

KEY GRAPHIC ELEMENTS

The weekly candle of week 27, bearish, totally encompasses, by its body, the candle of week 26. The negative message delivered, in the short term at least, takes shape. If necessary, we would be at the heart – that is to say in its broadest phase – of a diamond figure. As a reminder, this is a figure close to a rhombus. Graphically, the diamond looks like a more or less flattened diamond: at the start of the pattern’s formation, prices move inside a widening wedge, then, halfway through, they oscillate at inside a tapering triangle. The intense volatility on Thursday supports this thesis.

This figure can be invalidated, in particular in the event of an early exit from below.

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.

The News Bulletin 247 board

CAC 40
Negative
Resistance(s):
7410.00 / 7500.00 / 7585.00
Medium(s):
7015.00 / 6885.00 / 6800.00

Hourly data chart

Graphic made from the software Prorealtime

Chart in daily data

CAC 40: An unattractive figure of congestion (©ProRealTime.com)
Graphic made from the software Prorealtime

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