CAC 40: The hemorrhage is controlled

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The hemorrhage is temporarily stopped on the Parisian market, which was able to rely yesterday on a decline in crude oil prices and rather reassuring statistics on the front of tensions on American employment. Stable at the close, the flagship Parisian index, at the end of a volatile session, therefore remained below the symbolic threshold of 7,000 points.

The survey by the private human resources firm ADP (Automatic Data Processing) has just highlighted 89,000 job creations in the private sector in September, a number well below the target. Enough to bring relative relief, as the publication of the monthly NFP (Non Farm Payrolls) report approaches. The opportunity will be clear to confirm or not an easing of tensions on employment, tensions themselves generating inflation. The meeting should therefore be marked in red in the speakers’ calendars, tomorrow at 2:30 p.m. In the meantime, operators will be able to take note this Thursday of new weekly registrations for unemployment benefits.

For statistical completeness, the ISM services index in the United States in September fell to 53.6 from 54.5 the previous month, this time in line with expectations.

The CME’s FedWatch tool predicts a 25 bps rise in Fed Funds next month with a probability of just over 20%. Not negligible therefore, but a probability which has nevertheless contracted significantly.

On the value side, certain cyclical stocks suffered, particularly in tech, potentially due to the rise in interest rates. OVH lost 8.6% and Atos 6.7%. Atos has also announced the appointment of a new general manager in the person of Yves Bernaert. Reuters notes that this is the third chief executive appointed in less than two years. Oil and oil-related stocks have fallen in the wake of oil prices. TotalEnergies fell 1.9%, Vallourec dropped 3.2%. Orange gained 1.9% supported by Bank of America, which went from “underperform” to “buy” on the stock, judging that the group is starting to check the boxes that appeal to investors in the telecoms sector.

On the other side of the Atlantic, Wednesday was the time for some one-off purchases on the cheap. If the Dow Jones gained 0.39% to 33,129 points, the Nasdaq Composite gained 1.35% to 13,236 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.91% to 4,263 points.

An update on other risky asset classes: around 8:00 a.m. this morning on the foreign exchange market, the single currency was trading at a level close to $1.0510. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $84.60.

On the agenda this Thursday, to follow as a priority new registrations for unemployment benefits over a week in the United States, at 2:30 p.m.

KEY GRAPHIC ELEMENTS

The flagship tricolor index came out at the start of week 39 from the bottom of a “diamond” pattern; we were awaiting confirmation, in particular from a sectoral federation, since the luxury sector alone is not enough to categorize the movement. We had participation on Wednesday from the technology sector, and to some extent from the automotive sector. It is now the banking sector, and that of construction, which has begun to participate in the downward movement. A pullback on the diamond occurred on Friday 29/09, clearly, before a clear resumption of downward pressure. The bearish message is reinforced.

FORECAST

Considering the key graphical 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 below resistance at 7200.00 points.

Hourly graph

Daily Data Chart