(News Bulletin 247) – Start of the session probably in the red this Thursday, as Metavers (ex-Facebook) plunged into post-market trading after returning a disappointing quarterly copy, forcing the group founded and led by Mr. Zuckerberg to review lower its forecasts. Moreover, caution will be required as the outcome of a new ECB Governing Council draws near. Verdict at 1:45 p.m. for the monetary policy decision and at 2:30 p.m. for the press conference.
If the tone adopted by the ECB is much less hawkish that across the Atlantic, “a real uncertainty reigns before the ECB’s decision and Christine Lagarde’s press conference: the money markets in the euro zone continue to “price” a rate hike between now and December while the latest communications from the members of the ECB postponed this hypothesis to 2023 at the earliest.” notes Alexandre Baradez (IG France). “We could see a pivot […] on that issue.”
‘It would therefore be surprising if the message delivered were as accommodating as some still expect,’ warns M Baradez. and that the ministers of the euro zone were naturally concerned”, he continues.
The ECB will have to take into account a new surprise acceleration in prices in the Euro Zone. Published yesterday, the first inflation estimates in annualized data in the Euro Zone show an increase of 2.3% in the corrected prices of energy, food, alcohol and tobacco. This is significantly above the ECB’s target (2.0%) and the market consensus (+1.9%). Including volatile elements, the rise in prices over one year reached +5.1%.
Across the Atlantic, the ADP (Automatic Data Processing) survey highlights a “destruction” of more than 300,000 jobs, where the financial community was rather expecting a soft landing, after almost 800,000 job creations in the sector. private sector (excluding agriculture) in December. Friday’s NFP report will be all the more followed.
On the values side, Dassault Systèmes (+ 2.09% to 43.015 euros), Capgemini (+ 1.89% to 204.90 euros) and Teleperformance (+ 1.63% to 342.20 euros) appeared at the close on Wednesday in a good place of the CAC 40 charts, while the best performance of the day went to another growth champion, Eurofins (+2.2%)
On the other side of the Atlantic, the main equity indices nibbled away a few points on Wednesday, like the Dow Jones (+0.63% to 35,629 points) or the Nasdaq Composite (+0.50% to 14,417 points), still in a major price/volume divergence. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.94% to 4,589 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 $1,1290. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $87.90.
To follow on the agenda this Thursday, to follow in priority the PMI services (IHS Markit) in final data in the Euro Zone at 10:00 a.m., the European monetary policy decision at 1:45 p.m., the press conference at 2:30 p.m., and across the Atlantic, the weekly registrations for unemployment benefits at 2:30 p.m. and ISM Services (final data) at 4:00 p.m.
KEY GRAPHIC ELEMENTS
An oblique line of support gave way on Monday under the sectorally federated assaults of the selling camp, in a very high level of participation. This release of selling energy at this stage, in a single session (24/01), constitutes a major technical fact which characterizes the hypersensitivity of a market which is increasingly and continuously questioning the levels of valuation of the shares. . The entry into the bear market is not formally characterized, but the situation calls for the greatest vigilance under this slant. She was reinstated at the very end of the week. We put her under close surveillance.
In the immediate future, plotting a wedge in hourly data is not very engaging.
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 7390.00 points.
Hourly data chart
Chart in daily data
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Source: Tradingsat
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