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The CAC 40 index traced a so-called bearish engulfing candle on Thursday, in a climate inviting a defensive posture at the opening of the Jackson Hole symposium, and after the publication of activity indicators (PMI) very disappointing in Europe on Wednesday. In the end, the exciting results of NVidia did not benefit the whole of the technological rating, the Nasdaq Composite suffering a severe setback (-1.87%).
The Jackson Hole symposium, the traditional annual high mass of the world’s moneymakers, officially opened yesterday in the idyllic eponymous valley of Wyoming. The opportunity to see how the fight between the hawks and the doves will be organized in the months to come, in an inflation environment that is about to be brought under control, but far from the target trajectories. Indeed, “July minutes from the FOMC (Federal Open Market Committee) perhaps best sum up the mood of Western central bankers, indicating that most participants continue to be concerned about “significant risks rise in inflation,” say strategists at Muzinich & Co.
As a reminder concerning the activity indicators published on Wednesday, the PMI in very first estimates for the current month, were particularly disappointing for services in the whole of the Euro Zone, at 48.7, while the market consensus foreshadowed a less significant drop, in any case above 50 points which, as a reminder, separates a contraction from an expansion of the sector in question. This is a 30 month low. The disappointment is also severe in the German industrial sector alone, a driving force for the old continent, at 39.1, very close to the target, however.
Regarding the accounts of NVidia, the newcomer to the merry band of FANGAM, they were eagerly awaited because they were a barometer for the entire generative AI market, the one that consumes the most important computing resources. However, NVidia, historical specialist in graphics cards, which are known to consume a lot of computing resources, now defines itself, in all humility, as the world leader in computing. And therefore, implicitly, of the best “supplier” for generative artificial intelligence.
The company’s accounts, beating high expectations, somehow validate the growing demand for AI-based services. These high expectations, Nvidia has not exceeded them but pulverized. Which obviously delighted Wall Street, the action jumping 6.6% in post-closing trade on Wednesday evening. In the second quarter of its 2023-2024 fiscal year which will end next July, Nvidia saw its revenue stand at $13.51 billion, a jump of 101% year-on-year and 88% compared to in the previous quarter. The datacenter segment, which therefore reflects the demand for the group’s products related to AI and generative AI, saw its revenues rise to 10.32 billion dollars, reflecting a year-on-year increase of 171%.
If the title opened very strongly on Thursday, it closed at equilibrium, which says a lot about the psychological state of the market, especially on growth stocks.
In terms of statistics on Thursday, durable goods orders in the United States for the month of July fell sharply by 5.2%, a little stronger than the consensus had predicted (-4.1%). Excluding automobiles from the product mix, however, the numbers are less depressing.
As for values, STMicroelectronics suffered the largest drop in the CAC 40 (-2.48%) ahead of Renault (-2.4%). Air Liquide resisted (+0.5%) thanks to an increase in buying advice from Berenberg. Maisons du Monde lost 3.1% after announcing the departure of its financial director.
Across the Atlantic, red dominated on Thursday, with the Dow Jones contracting 1.08% to 34,100 points, and the Nasdaq Composite falling sharply, 1.87% to 13,463 points. The S&P500, benchmark barometer of risk appetite in the eyes of fund managers, dropped 1.35% to 4,376 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 $1.0790. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $79.40.
On the agenda this Friday to follow in priority the IFO business climate index in Germany at 10:00 a.m., as well as the American consumer confidence index (U-Mich, revised data) at 4:00 p.m.
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 at the rendezvous… Signs of fatigue within this diamond are already perceptible. The bearish engulfing August 24, at the center line of the diamond, is.
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.
The News Bulletin 247 board
Hourly data chart
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