CAC 40: Decisive week with a back-to-school FOMC

(News Bulletin 247) – The cold snap is biting on technological heavyweights across the Atlantic, growth stocks on which expectations are inevitably greedy, and which are under pressure from the heating of 10-year Treasuries, as the Fed tightens the tone. Fed which will complete a new Monetary Policy Committee (FOMC) this week. However, no federal rate hike is expected, and barring any surprises, the start of the tap tightening will occur in March. The Nasdaq Composite lost 2.72% to 13,768 points on Friday, bringing its reflux since January 1 to 12%.

The atmosphere is mechanically fresher on this side of the Atlantic, although Ms. Lagarde wanted to be reassuring last week with a “dove” tone. Our GAFAM (or FAN FAM), which are in the luxury sector, namely our KOHL for Kering, L’Oréal, Hermès, and LVMH will be watched like milk on the fire this week.

In summary and with the approach of the next Fed meeting, the tensions of the last few days on sovereign yields suggest that operators are counting on a sharper tightening than initially expected, with a possible first rate hike as early as the month of March.

In terms of statistics, very little to put in your mouth. It should be noted, however, that the consumer confidence index in the Euro Zone (EuroStat) came out perfectly in line with expectations.

On the values ​​side, both sectoral and factorial federation on Friday, where we found in the “Palmarès Baisse” of compartment A both values ​​typically Value of the auto sector, such as the equipment manufacturer Faurecia (-2.99% to 41 .47 euros), or Stellantis (-3.59% to 18.11 euros), and technology stocks like Dassault Systèmes (-2.47% to 45.07 euros), or Wordline (-2.33% to 45 ,30 euros). 38 out of 40 files in the CAC ended Friday’s session in the red.

On the other side of the Atlantic, the main equity indices took a hit in the last session of a predominantly red week, especially in the hypersensitive tech sector. The Dow Jones will have lost 1.30% to 34,265 points on Friday and the Nasdaq Composite 2.72% to 13,768 points. The S&P 500, the reference barometer of risk appetite in the eyes of fund managers, fell for its part by 1.89% to 4,397 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 1,1320$. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around 85,60$.

To follow on the agenda this Monday, to follow in priority at 09:30 the German manufacturing PMI in “flash” data. Equivalent data for the entire Euro Zone will be released at 10:00 a.m. and for the United States at 3:45 p.m.

Note, for holders of positions on the DR: the monthly liquidation will take place at the end of the session on Wednesday, January 26. The calendar of liquidation dates over the year is available here.

KEY GRAPHIC ELEMENTS

The underlying trend is not threatened at this stage, but it is clear that the losses on Wall Street last week had repercussions in Paris, in the form of one-off and targeted profits in Paris, profit taking whose extent must be considered in the light of initial progress, dossier by dossier. All the same, we remain well above a bullish slant and the 100-day moving average (in orange), benchmarks which gradually tend to merge, and which will therefore gain in technical significance. We are leaning towards the scenario of a price approach to this support level. She is currently on 6,940 points. It will then be time to select the best candidate files for technical rebounds.

PREVISION

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 7390.00 points.

Hourly data chart

Chart in daily data

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