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The CAC 40 (+0.47% in the immediate vicinity of 7,200 points) will have benefited Monday from a lowering of a Chinese key rate to return, timidly, to green, in very meager volumes.
Remember that last 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 on summer vacation. 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.
“These concerns have weighed on Europe, which is down more than 2%,” notes Romane Ballin, bond manager at Auris Gestion, in a note entitled “seagull cries, sign of a storm?” “The luxury sector was particularly affected due to its exposure to Chinese consumption, as well as the automotive sector following the announcement of a new price cut by Tesla in China. The situation in Germany remains worrying with a still negative economic sentiment and the Netherlands follow its course by officially entering recession in turn.
A context on rates that reinforces the attention that the market will pay to the Jackson Hole symposium, a sort of large conference of central bankers organized by the Federal Reserve (Fed), at the end of the week in Wyoming. The speech of its president, Jerome Powell, will be harshly scrutinized, and the least of his elements of language interpreted…
No significant statistical figure, capable of shifting the course in any case, was on the agenda yesterday. Agenda which densifies this Tuesday with the sales of old residences and the manufacturing index of the Richmond Fed, simultaneously at 4:00 p.m. Tomorrow will be published the first estimates of the PMI activity indicators. The German industrial component, to be watched like milk on the stove, is expected at a sad 38.6 in the sense of the market consensus.
On the values ​​side, cyclicals did well on the CAC 40, where the two car manufacturers finished at the top of the index (+1.8% for Stellantis, +1.88% for Renault). Eramet gained 2.97%. Payments group Worldline closed 1.05% lower as its Dutch peer Adyen continues to slump on the Amsterdam Stock Exchange, falling 8.6% on Monday, after losing 3 % on Friday and especially 39% on Thursday, following half-year results below expectations. Finally, Virbac returned nearly 3%, penalized by a lowering of the recommendation from Stifel from “buy” to “hold”.
Across the Atlantic, major equity indices ended in mixed order, with the Dow Jones contracting 0.11% to 34,463 points and the Nasdaq Composite managing to gain 1.56% to 13,497 points. , benefiting from a very slight lull in 10-year US Treasury yields. The S&P500, the reference barometer of risk appetite in the eyes of fund managers, gained 0.69% to almost 4,400 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 $1.0920. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $80.80.
KEY GRAPHIC ELEMENTS
From August 10 to 18, the flagship tricolor 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 7250.00 points.
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