(News Bulletin 247) – This article, in free access, is produced by the stock market analysis and strategy research team of News Bulletin 247. To not miss any opportunity, consult all the analyzes and discover our portfolios by accessing our Privileges area.
Sixth drop in rank for the CAC 40 which ended Wednesday’s session down 0.84% to 7,194 points. The members of the equation are clearly identified: recurring fears about the German and Chinese economies, the firmness of crude oil prices and the pressure of long rates.
Thomas Giudici (Auris Gestion) takes a step back, on the Chinese economy: “After decades of unbridled growth, based on cheap exports and the distribution of credit, the transition desired by Xi Jinping towards a “new normal” is not happening. will not go smoothly.”
“Indeed”, continues the head of bond management, “the shift towards an economy based more on household consumption, services and advanced technologies rather than exports leads to growth that is certainly of better quality but less strong. The landing is therefore difficult for China to manage as the post-covid world economy has been profoundly modified (willingness to relocate certain key industries) and is currently experiencing a slowdown.
The country’s economic situation is clearly the subject of concern after a slowdown in services activity last month. The PMI-Caixin services index fell to 51.8 points in August, after 54.1 in July. The very strategic real estate sector, colossus at the foot of clay of the Middle Empire continues to focus attention.
The barrel of Texas light crude (WTI) was close to $87 on Wednesday, after the announcement by Saudi Arabia which has decided to maintain its production cuts for three months. “For central banks, rising oil prices are complicating the picture, although as it stands we still think the Fed and the ECB (US Federal Reserve and European Central Bank) should give each other time and maintain their rates unchanged by the end of the year”, judge Xavier Chapard of LBPAM.
In terms of statistics, RAS concerning the July monthly deficit of the American trade balance at 65 billion dollars, close to expectations. The PMI ISM Services came out up at 54.5, significantly above the target.
In terms of values, luxury is still not in great shape and is at the top of the biggest declines in the Parisian market on Wednesday evening. LVMH dropped 3.6%, Kering lost 2.3% and Hermès returned 1.9%, penalized by an HSBC note on the sector as well as comments by the boss of Richemont on the state of demand for luxury products.
On the other side of the Atlantic, red dominated all equity indices on Wednesday, like the Dow Jones (-0.57% to 34,443 points) or the Nasdaq Composite (-1.06 % at 13,872 points). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, fell 0.70% to 4,465 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 $1.0720. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $86.00.
On the agenda this Thursday, to follow in priority the revised data of the American Q2 GDP at 11:00 a.m. and the weekly registrations for unemployment benefits in the United States at 2:30 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 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
Chart in daily data
function creatOutbrainJs() {
const creatJs = document.createElement(“script”);
creatJs.defer = true;
creatJs.src = “https://widgets.outbrain.com/outbrain.js”;
return document.body.appendChild(creatJs);
}
window.didomiOnReady = window.didomiOnReady || [];
window.didomiOnReady.push(function(Didomi) {
console.log(“Didomi ready “);
Didomi.getObservableOnUserConsentStatusForVendor(164)
.filter(function (status) { return status !== undefined })
.subscribe(function(consentStatus) {
if (consentStatus === false || consentStatus === true) {
console.log(“Didomi consent -> exécution du script outbrain “, consentStatus);
creatOutbrainJs()
}
});
});
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.
