CAC 40: Bearish pressure is increasing

(News Bulletin 247) – While the Chinese authorities tried to reassure investors in recent days, Country Garden came to spoil the party. In fact, the Chinese promoter did not respect its final deadline for the payment of the coupon on a bond in dollars. The developer was due to pay a total of $15.4 million this week. Country Garden has about $200 billion in liabilities, including nearly $10 billion in dollar-denominated debt. Geopolitics overshadowed the publication of inflation yesterday in the euro zone, yet the figures came out without any unpleasant surprises. Investors fear a widening of the conflict in the Middle East, while diplomatic declarations become more bellicose between the different stakeholders. Concerning the macroeconomy, we will mainly expect figures from the United States today, with at 2:30 p.m. French time the publication of weekly unemployment claims followed by the Philadelphia Fed’s manufacturing index. At 4:00 p.m. French time, investors will this time learn about sales of existing homes then they will wait for the speech from the head of the American central bank at 6:00 p.m. Despite American markets clearly in the red, Netflix is ​​doing well with a good publication, which is not the case for Tesla which disappoints investors in all metrics. Tesla’s revenue fell short of expectations for the latest quarter and its profit margins declined. The reason: planned factory closures and price reductions have affected the performance of the American manufacturer. Tesla reported net profit of $1.85 billion in the latest period, a 44% decline from the previous year. Today, in France, we are expecting publications from Nokia, Pernod Ricard, Renault and even L’Oréal. In the United States, TSMC, American Airlines, AT&T and Intuitive Surgical are expected.

KEY GRAPHIC ELEMENTS

Technically the index showed a new session of consolidation. Closing below 7000 points indicates fragility on the part of buyers. The next support at 6885 points should be tested in the coming hours and give rise to a first technical rebound in intraday data.

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