CAC 40: Widespread enthusiasm after American inflation

(News Bulletin 247) – This article, with open access, is produced by the stock market analysis and strategy research team at News Bulletin 247. To ensure you don’t miss any opportunities, consult all the analyzes and discover our portfolios by accessing our Privileges area.

A successful session on Tuesday at the Paris Stock Exchange, where the CAC 40 stepped on the accelerator pedal after the publication at 2:30 p.m. of confirmation of a marked slowdown in American inflation. This slowdown even went beyond what the financial community hoped for, thus catalyzing further easing on rates. The flagship Parisian index gained 1.39% to 7,185 points, driven by files which had particularly suffered in recent months, such as Eurofins Sc (+4.41%), Teleperformance (+4.81 %), Alstom (+5.63%) or Wordline (+8.26%).

The monthly consumer price indices, regardless of the product base chosen, all came out below expectations. Compared to October 2022 in particular, all products combined, inflation now stands at +3.2% compared to +3.7% the previous month, below the target at +3.3%, according to the latest data published by the Department of Labor.

Better yet, so-called “core” inflation, that is to say excluding the price of food and energy, stood at 4.0% over one year, the lowest for more than two years. years. Today’s statistic further distances the prospect of a rate hike from the American Federal Reserve. Moreover, the markets estimate the probability of a rate increase of 0.25 percentage points next month at 5.2%, compared to another 14.5% the day before, according to the CME FedWatch tool.

Enough to reassure the Fed in the idea that its firm monetary policy is finally bearing fruit, and enough to rule out the idea of ​​a final increase in Fed Funds before the end of the year.

To be complete on the statistical front, we will point out the publication of a surprise increase in the ZEW confidence index in the German economy. Not only did the indicator exit negative territory, but it greatly exceeded expectations, coming out at 9.8 points, the highest since March.

On the values ​​side, after Orpea on Monday, it is Clariane’s turn to be the subject of serious concerns about its financial health. The former Korian lost 12.4%, now reaching record lows after announcing a major financing plan intended to avoid a payment default in 2024.

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 $1.0870. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $78.60.

On the agenda this Wednesday, to follow as a priority, at 2:30 p.m., a group shot of major statistics across the Atlantic: producer price indices, retail sales and retail sales.

KEY GRAPHIC ELEMENTS

At the end of a spectacular session, the flagship Parisian index came up against 7,200 points, which still constitutes a resistance level. Above, the oxygen supply is ensured. Below that, volatile oscillations between 7,000 and 7,200 points remain the preferred scenario.

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 7200.00 points would revive the buying tension. While a break of 7000.00 points would restart the selling pressure.

Hourly graph

Daily Data Chart