CAC 40: Will the French index end the week above or below 7,200 pts?

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The CAC 40 index, weighed down by the luxury sector alone, will have consolidated on Thursday (-0.57% to 7,168 points), without hampering its chances of conquering 7,200 points, which remain the technical challenge of the week. . The warning on the British Burberry penalized the entire luxury sector in Paris, and more particularly LVMH (-1.79%) and Kering (-2.69%). The British company warned that the “slowdown in global luxury demand” could weigh on its 2023-2024 annual objectives.

In terms of statistics, the Philly Fed (Philadelphia Fed manufacturing index) rose slightly from -9.0 to -5.9, and weekly registrations stood at a level of 231,000 new units, exceeding 10,000 the consensus. Enough to further fuel the prospect of a pause in rate increases by the Federal Reserve, after the publication of two statistics showing a slowdown in consumer and producer prices, Tuesday and Wednesday.

Nevertheless, “the continuation of the rally on the markets will probably have to go through ostensibly more flexible messages from central banks. The longer these messages take to arrive in the face of the observed economic slowdown, the more doubt will set in on the stock markets with take profits accordingly,” warns Alexandre Baradez (IG France).

In terms of values, Alstom gained 4.4% the day after a decline of 15% after the announcement of an action plan to restore its finances. Excluding the flagship index, Vallourec jumped 5.2% after raising its gross operating profit forecast. Elior jumped 9.7%, supported by TP ICAP Midcap which this morning raised its purchase recommendation on the collective catering group.

On the other side of the Atlantic, the main equity indices ended Thursday’s session in disorganized order, the Dow Jones consolidating by 0.13% to 34,945 points and the Nasdaq Composite managing to gain 0.07% to 14,113 points. The S&P500, the reference barometer of risk appetite in the eyes of fund managers, finished close to balance not far from 4,500 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 Friday, to follow as a priority the final data of the consumer price indices in the Euro Zone for the month of October at 10:00 a.m. and housing starts and building permits across the Atlantic 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