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In the absence of benchmarks from Wall Street (Labor Day), and at the dawn of a week much less rich than the previous one in statistical benchmarks, the CAC 40 ended Monday’s session in the red, forming a Bearish engulfing candle approaching the midline of a large diamond congestion pattern. Remember that the exit direction of this figure will induce a directional for many weeks. Operators were able to digest the federal monthly report on employment, a statistical highlight published on Friday.
As a reminder, if these NFPs (Non Farm Payrolls) do not allow us to formally conclude that there has been a lasting drop in tensions on the job market across the Atlantic, it is clear that certain signals are encouraging. In particular, the unemployment rate, expected to be stable at 3.5% of the active population, rose significantly, to 3.8%, making it possible to envisage a cooling of the economic machine…. That’s good the declared objective of the Fed, after all!
In addition, average hourly wages will have increased in August by only 0.2% from one month to another, where the consensus foreshadowed an increase of 0.3%. This is also an encouraging sign that can dismiss the specter of the price/wage spiral. On the other hand – and this is where the shoe pinches – the number of job creations in the private sector, excluding agriculture, amounts to 187,000, against a target of 169,000 and a month of July revised to 157,000.
“Figures without too much relief which validate the hypothesis of a status quo to come from the Fed”, for Thomas Giudici, head of bond management at Auris Gestion. The Fed will convene its FOMC Monetary Policy Committee on September 19-20.
Yesterday, traders took note of the Sentix index of investor confidence in the Euro Zone, down sharply to -21.5, lacking yet pessimistic expectations. “The situation in Germany remains particularly precarious”, can we read in a comment for the less decided accompanying the publication. The Sentix measured for this publication “the weakest values since July 2020, when the economy was slowed by the first confinement due to the coronavirus. Germany is also weighing heavily on the euro zone economy as a whole. The recession is deepening. But even in the United States, which has so far resisted well and defied the Fed’s restrictive policy, economic data is in sharp decline. The tipping point of a global recession is less distant than we think. might think so.”
On the stock side, Saint-Gobain was subject to profit taking (-3.14% to 58.36 euros) after the announcement of its inclusion in the pan-European Euro Stoxx 50 index from September 18. This promotion within the stock market elite was expected by market observers such as UBS, which already noted in July that Saint-Gobain was a serious contender for a place in this index. Thales ended up 1.1% benefiting from the support of Jefferies raised its recommendation to buy.
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 $1.0770. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $85.70.
On the agenda this Tuesday, to follow in priority retail sales in the Euro Zone at 10:30 am, the American trade balance at 2:30 pm, and the American ISM services PMI at 4:00 pm.
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…
Signs of fatigue within this diamond are already noticeable. The bearish engulfing of August 24, with an aftershock on September 04, at the level of the middle line of the diamond, constitutes one of them. Another is the weekly candle pattern for the week ending September 1st. Failure against the upper limit of the large diamond is validated.
To sum up, it is the exit direction of this congestion pattern that will be fundamental, and will finally give a lasting direction.
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 7398.00 points.
The News Bulletin 247 board
Hourly data chart
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