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The past week will have been complicated for the CAC 40, which lost 2.40% in volumes far from starving, given the period, the heart of August, deserted by a large fringe of operators in summer holidays. With a public holiday on top of the market (August 15, Assumption, not unemployed on the Paris Stock Exchange). Signs of the German economy’s fragility, the economic slowdown in China, and the US banking sector weighed heavily. And this while the operators acted on the idea of ​​maintaining federal rates at a high level, on a plateau, for many months, after the publication of the MInutes of the Fed.
The document shows, between the lines, that some Fed executives did not formally rule out an even bigger Fed Funds hike in July. For the month of September, a status quo on rates is the scenario that holds the rope, with a probability of 90.50% within the meaning of the CME’s FedWatch tool. Tensions in the bond market resulted in a spike in 10-year Treasuries, US Treasury bond yields, to a level not seen since 2007.
For Deutsche Bank strategists, the Fed minutes gave investors confidence that the Fed’s restrictive policy could last “for a while.” “So while inflation has been more encouraging lately, the activity data, which remains solid, should allow the Fed to maintain its hawkish stance heading into the meeting. of September”, continues the German bank.
As for values, luxury, a sector with high valuations and sensitive to the macroeconomics, has to deal with both fears about China and the rise in interest rates, which is weighing on growth stocks. This Friday, LVMH lost 1%, L’Oréal 1.1%, Kering also 1.1% and Hermès 0.7%. Over the week as a whole, LVMH lost more than 5%, Kering more than 4.7%, L’Oréal more than 3.4% and Hermès more than 3.2%. Spie (-1.7% on Friday) announced a new targeted acquisition by buying the German BridgingIT.
On the other side of the Atlantic, the main equity indices ended a complicated week at levels on Friday close to balance: +0.07% to 34,500 all round for the Dow Jones and -0, 20% for the Nasdaq Composite, by nature of its composition, sensitive to the monetary question. The S&P500, the reference barometer of risk appetite in the eyes of fund managers, remained stable at the close at 4,370 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 $1.0880. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $81.20.
On the agenda this Monday, no major statistical figures to report.
KEY GRAPHIC ELEMENTS
From August 10 to 18, in one stroke, the tricolor flagship index melted from one terminal to the other of the vast flattened rhombus (diamond) which has concentrated its nervous oscillations since May 24, breaking the line of neckline of a bearish chart pattern at 7,250 points. A continuation of the oscillations within the diamond is envisaged. Any exit from the latter will give a direction provided that volumes, and a sectoral federation, are there…
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 72520.00 points.
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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.
