CAC 40: The 7,200 points, the technical issue of the week

(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.

The continuation of the easing movement on the interest rate markets, following the publication on Tuesday of American consumer prices below expectations, allowed the market to maintain momentum, closing on Wednesday slightly above the 7 mark. 200 points. Level which clearly presents itself as the technical challenge of the week. The CAC 40 nibbled 0.33% to 7,209 points, despite the plunge of Alstom (-15.03%), due to a possible capital increase, which would massively dilute existing shareholders. Conversely, Renault increased by 2.3%, after its investor day which was full of announcements. The Diamond brand still intends to list Ampere, its subsidiary dedicated to electricity, on the stock market in spring 2024 but not at any price. And the group announced the launch of a new electric car for less than 20,000 euros.

As a reminder, 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.

“Even if the main scenario shows a continued decline in inflation, there is no shortage of reasons for a slower decline,” warn BFT IM strategists, in a column entitled “Serene markets but, despite everything, cautious “.

“Oil prices have remained very volatile in recent months and could be impacted by a return of geopolitical tensions. The job market remains solid and could also slow down the correction of inflation with sustained wage pressures.”

A new battery of American statistics yesterday pleased the financial community. Producer price indices, clearly below expectations, like monthly retail sales, point to a soft landing for the American economy. The “Empire State” index (New York Fed manufacturing index), at its highest since April, pleasantly surprised.

On the other side of the Atlantic, the main equity indices ended up, however far from their session high points, like the Dow Jones (+0.47% to 34,991 points) or the Nasdaq Composite (+0.07% to 14,103 points). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.16% to 4,502 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 $1.0840. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $76.20.

On the agenda this Thursday, a speech from the President of the ECB at 12:30 p.m., the Philly Fed and weekly registrations for unemployment benefits at 2:30 p.m.

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. The 7,200 points clearly present themselves as the technical challenge of the week

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