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The CAC 40 left in the red on Tuesday (-0.69% to 7,269 points), in a market atmosphere upset by the surprise decision of the Meloni government to tax the superprofits of the big banks, generated in the environment of high rates . The FTSE MIB, the flagship equity index of the Milan Stock Exchange, lost 2.12% in stride.

Italy has decided to levy a 40% tax on banks’ “billion-euro surplus profits” to offset the cost to households and businesses of soaring interest rates, the vice-president announced on Monday evening. Prime Minister Matteo Salvini. The tax on the excess profits of banks, which must be settled by June 2024, will concern the accounting years of 2022 and 2023, AFP learned from a government source. Transalpine banking institutions are suffering hard this Tuesday in Milan: Bper Banca loose 8%, Finecobank returns 7.5%, Intesa Sanpaolo -7.4%, Monte dei Paschi di Siena (Mps) -7.3%. Find the details here.

Risk appetite also remained compressed by a series of rating downgrades for US banks by Moody’s. The rating agency also warned that it had placed six other major banks under review for possible downgrade, including Bank of New York Mellon, US Bancorp, State Street and Truist Financial. Moody’s also downgraded the outlook from “stable” to “negative” on the ratings of 11 banks such as Capital One, Citizens Financial and Fifth Third Bancorp.

Disappointing figures on Chinese foreign trade completed the picture. In detail, exports in the country fell by 17.2% last month, showing their sharpest decline since the beginning of 2020. Year on year, they contracted by 14.5% against a decline of 12.5% predicted by consensus. Imports are not doing any better, and have plunged 12.4%, where a fall of only 5% was expected by the markets.

On the stock side, BNP Paribas and Crédit Agricole, the two establishments most exposed to the Italian market, lost 3% and 2.5% respectively, where Societe Generale lost 1.7%. Exposed for their part to China, LVMH returned 1.25%, Hermes 1% while Kering contained its decline to 0.6% on Tuesday evening.

On the other side of the Atlantic, the main equity indices ended Tuesday’s session in the red, like the Dow Jones (-0.45% to 35,314 points) and the Nasdaq Composite (-0 .79% at 13,884 points). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, lost 0.42% to 4,499 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 $1.0970. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $82.40.

On the agenda this Wednesday, to follow in priority the stocks of crude in the United States at 4:30 p.m. In the immediate future, reassuring figures on consumer and producer prices in China should support the CAC at the opening.

KEY GRAPHIC ELEMENTS

The exit from the congestion figure on Friday July 21 was thwarted twice, on July 26, on a wide gap, and over the whole of the past week, on a break in the short moving average. The bullish message has momentarily lost its meaning. We will monitor any formation (and confirmation at the end of the session) of a bearish gap. We witnessed yesterday at the close the perfect repetition of the August 02 candle, i.e. a doji of school with elongated shadows, marker of nervous indecision in the heart of an enlarged figure of consolidation.

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 7500.00 points would revive the tension in the purchase. While a break of 7084.00 points would relaunch the selling pressure.

The News Bulletin 247 board

CAC 40
Neutral
Resistance(s):
7500.00 / 7585.00 / 7740.00
Medium(s):
7084.00 / 7015.00 / 6885.00

Hourly data chart

Chart in daily data

CAC 40: Volatility within a broad consolidation pattern (©ProRealTime.com)

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