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While investors await new publications, in particular those of Dassault Systèmes, LVMH or even Microsoft and Alphabet across the Atlantic, good news from China should satisfy investors. Indeed, after the woes of real estate companies in recent hours, China’s politburo said it would tackle unemployment, speed up the issuance of special local government bonds and boost consumption of electronics, electric vehicles and other goods. The Politburo said it was “necessary to actively develop domestic demand” and “to increase consumption by increasing residents’ incomes.” This news should lift industrial and luxury stocks. Yesterday, the PMI indicators came out below expectations. The slowdown in activity in the euro zone was sharper than expected in July, demand in the services sector fell while factory production fell at its fastest pace since the outbreak of Covid. On the side of values, apart from publications, we will pay attention to Bayer in Germany. The group said it was going to write down 2.5 billion euros on glyphosate, due to falling prices but also demand for the weedkiller. The depreciation will lead to a net loss of 2 billion euros in the second quarter. Before the microeconomic publications, investors will be able to take note of the IFO, the business climate index in Germany at 10:00 a.m. and then this afternoon at 4:00 p.m. French time, the Conference Board’s consumer confidence.

KEY GRAPHIC ELEMENTS

Technically, the Parisian index is stabilizing around 7400 points without real buying conviction and without a bearish signal. Neutrality therefore remains but the seasonality, which should deteriorate in favor of the sellers, and the 7400/7500 points zone being a resistance zone, invite to initiate selling swing positions towards 7100 points.

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 7500.00 points.

The News Bulletin 247 board

CAC 40
Negative
Resistance(s):
7500.00 / 7585.00 / 7740.00
Medium(s):
7410.00 / 7084.00 / 7015.00

Hourly data chart

Chart in daily data

CAC 40: Good news from China (©ProRealTime.com)

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