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The Parisian market will have had a complicated week, plagued by doubts about the scenario of a soft landing of the main economies of the planet, after years of restrictive monetary policy. The CAC 40 (+0.62% Friday) will have lost 0.77% over the week as a whole, in the final part of a flattened diamond congestion figure. The direction of imminent exit of this Chartist figure also called diamond, will provide direction for the months to come.
For Jeanne Asseraf-Bitton, Head of Research and Strategy at BFT IM, “financial markets [sont] penalized by doubts about the perfect scenario of a soft landing and disinflation.” Apart from the American ISM services, which came out with a surprise rise, the main statistical indicators of the last two weeks have cooled the mood, particularly on the financial front. inflation.
“Risk appetite seems to be faltering again after several weeks of rebound. Largely, this is due to the rise in long-term interest rates, but also, recently, to a new episode in tensions between China and the United States”, explains Sebastian Paris Horvitz, of LBPAM.
The European Central Bank will hold its monetary policy meeting next week, on September 14. According to a Reuters survey, a majority of economists expect a status quo on rates. The US Federal Reserve will deliver its verdict on its key rates a week later.
“Whatever the September decision, we expect economic projections to be revised downwards,” anticipates Frederik Ducrozet, Head of Macroeconomic Research at Pictet Wealth Management. Importantly, inflation is expected to remain slightly above target throughout the forecast horizon, justifying a hawkish bias. Recent weakness in leading indicators such as PMIs may not be fully accounted for, if only for technical reasons, although chief economist Philip Lane suggested staff could adjust their projections accordingly . Regardless, a weaker growth profile would imply a wider output gap amid growing concerns over weaker supply.”
On the values side, Worldline regained 3.3% after losing more than 7% over the last three sessions. The luxury sector, which was struggling in recent sessions, has also recovered. LVMH took the lead in this stock market recovery movement with a gain of 2.2% at the close, followed by Kering (+1.5%) and Hermès (+0.8%). On the contrary Renault, which remained in the green for three sessions, ended its race in the red (-0.9%). Excluding the flagship index, Stef gained 2.8%, the half-year results came out above expectations and received a favorable reception.
On the other side of the Atlantic, the main equity indices ended Friday’s session symbolically in the green, far from the high points of the day, like the Dow Jones (+0.22% to 34,576 points ) and the Nasdaq Composite (+0.09% to 13,761 points). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.14% to 4,457 points.
An update on other risky asset classes: around 8 a.m. 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 the appetite for risk on the financial markets, was trading around $86.60.
On the agenda this Monday, to follow as a priority the volume of Italian industrial production at 10:00 a.m.
KEY GRAPHIC ELEMENTS
From August 10 to 18, in one go, the tricolor flagship index melted from one terminal to the other of the vast flattened diamond (diamond) which has concentrated its nervous oscillations since May 24, breaking in the process the line d neckline of a bearish chartist pattern at 7,250 points.
A continuation of the oscillations within the diamond is envisaged. Any release from the latter will give direction provided that the volumes, and a sectoral federation, are there…
Signs of fatigue within this diamond itself are already perceptible. The bearish all-encompassing of August 24, with a response on September 4, at the level of the median line of the diamond, constitute one. Another is the weekly candle structure for the week ended September 1st. The failure against the upper limit of the large diamond is validated.
To summarize, it is the direction of exit from this figure of congestion which will be fundamental, and will ultimately provide a lasting direction.
FORECAST
Considering the key graphical factors that we have identified, our opinion is neutral on the CAC 40 index in the short term.
We will take care to note that crossing 7398.00 points would revive the buying tension. While a break of 7084.00 points would restart the selling pressure.
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