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In any volume, the CAC 40 (+0.07% to 7,220 points) continued to gain height within a figure of diamond congestion. A jump without a solid base, mainly in favor of a single sector, luxury, driven by press reports on China with potential stimulus measures.
As Bloomberg reports, the People’s Bank of China, the country’s central bank, and the financial regulator, the NFRA, have urged banking institutions to extend repayment facilities on loans for property developers, a crucial sector for growth but struggling for several years. Beyond that announcement, the Chinese Securities Journal reported that China is set to “accelerate” its housing support actions, and, in a separate article, that Beijing may also introduce measures to boost business confidence, again according to Bloomberg. The Shanghai Securities News quoted an analyst, Wang Qing, of Golden Credit Rating, who considers that the authorities could relax the rules in terms of real estate purchases or mortgage loans or even take action to lower loan rates.
A file in particular, moreover, whetted the appetite of investors, it is Saint Gobain, which jumped 4% to 56.45 euros, driven by the good results of the Irish group Kingspan. All information here.
In terms of statistics, investors are nervously awaiting the publication, this Wednesday, of US inflation figures, in the sense of consumer prices, a monthly indicator that they will be able to compare with the latest monthly report on employment showing a very gradual cooling of tensions. According to the CME’s FedWatch tool, the probability of seeing a 25 basis point increase in Fed Funds remuneration at the end of the month is 92.4%.
After the Sentix of investor confidence in the Euro Zone on Monday, the ZEW of confidence in the German economy, published on Tuesday morning, is also unappealing. The index fell to -12.2, the lowest since December 2022. The first economy of the monetary union, formally in recession, is suffering the blow. The Sentix business cycle clock analysis tool is strongly in recessionary territory, with the current conditions component suggesting weaker GDP growth than we and the consensus expect, analysts insist. Nomura in a commentary note on the Sentix.
On the other side of the Atlantic, the main equity indices rose on Tuesday, with a particular mention for the Dow Jones with the support of banks (+0.75% to 15,790 points). The technology-heavy Nasdaq Composite rose 0.55% to 13,760 points. The S&P500, benchmark barometer of risk appetite in the eyes of fund managers, gained 0.67% to 4,439 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 $1.1030. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $74.60.
On the agenda this Wednesday, to follow in priority the consumer price indices in the United States. See you at 2:30 p.m., an appointment to mark in red on the agendas of market participants. In annualized data, consumer prices are expected to rise by 3.1%, a net slowdown therefore, for the broadest product base. If this contraction in inflation were to be confirmed, it would be largely due to energy and food.
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 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 7015.00 points would relaunch the selling pressure.
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I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
