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After a prosperous week (+3.71% in week 44), the CAC 40 index switched to consolidation mode, around the symbolic threshold of 7,000 points. Remember that the good performances of the flagship Parisian index last week are directly linked to the easing of tensions on the bond markets, thanks in particular to a report on American employment showing signs of calm.
As a reminder, the unemployment rate, first of all, expected to be stable at 3.8%, has actually increased slightly to 3.9% of the active population. Average hourly wages do not increase by 0.3% monthly, as the consensus predicted, but only by 0.2%. Finally – and the figure is spectacular – job creations collapse by half (150,000 in October compared to 297,000 in September), again far from the target, close to 175,000.
Investors still hope to see the US Federal Reserve maintain its key rates at the end of its December meeting, before a possible cut in June. Especially since the latest American employment figures published on Friday lend credibility to the thesis that the rates of the American institution have reached their peak.
In terms of statistics on Monday, there were no surprises on the final data for the PMI activity indicator in services in final data for October, at 47.8 points for the entire Euro Zone. Remember that a score below the 50 point mark means a contraction of the sector in question, by construction. Note also that the Sentix investor confidence index, although still clearly in negative territory (-18.6), came out above the target. The institute insists on the German contribution to the final score.
On the values ​​side, Orpea ended down 5%, below the symbolic euro at 0.996 euros. The retirement home operator indicated this Monday morning that it had postponed its medium-term financial objectives by one year. Note the significant decline in a number of real estate companies on the market yesterday, such as Gecina (-3.31%), Unibail-Rodamco (-3.72%), Covivio (-3.91%), Nexity (-4.36%), Icade (-4.52%) and Carmila (-4.61%), the red lantern in compartment A.
To be continued, Téléperformance which published yesterday evening after-market.
On the other side of the Atlantic, the main equity indices gained a few points on Monday, still riding on the NFP report from the previous session. The gains are very limited: 0.10% for the Dow Jones and 0.30% for the Nasdaq Composite. The S&P500, the reference barometer of risk appetite in the eyes of fund managers, “progressed” by 0.18% to 4,365 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 $1.0695. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $80.00.
On the agenda this Tuesday, to follow in priority the producer price index in the Euro Zone at 10:00 a.m. and the American trade balance figures at 2:30 p.m.
KEY GRAPHIC ELEMENTS
The technical situation on the CAC 40 is quite readable: the index came out of a flattened diamond (diamond) pattern on September 25, which pushed the market into the red. Two pullbacks later, it was the turn of the symbolic threshold of 7,000 points to suffer the threat of prices, a threat put into effect on October 18, 19 and 20 in increasing trading volumes.
After the formation of a congestion figure near 6,800, the past week will have been the scene of a significant technical reaction, orchestrated and amplified by the values ​​which had initially been the most mistreated. This energy, exhausted early, should give way to a rapid filling of the gap of November 2, just below the key threshold of 7,000 points.
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.
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