CAC 40: Reduced activity, thanks to Thanksgiving

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In the absence of benchmarks from Wall Street, closed for Thanksgiving, the Parisian market continued to advance timidly (+0.24% for the CAC 40), in a very reduced level of activity. In addition, New York Stock Exchange stock trading will only take place for half a session (closing at 1 p.m. local time) this Friday, November 24 (the day after Thanksgiving).

If operators could not count on Wall Street, they were able to have the support of activity indicators in Europe. The PMIs, in first estimates for the current month, without deviating significantly from their respective targets, pleasantly surprised, particularly on the industrial component (43.8), notably thanks to an increase in the German score.

Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, provided the following comments and additional insights: “while the decline in overall activity has accelerated in France, the composite PMI index signals a slowdown in contraction in Germany.” While providing this caveat: “the invalidation by the Constitutional Court of the special off-budget fund used by the German government to finance its public investments risks, however, putting a brake on this trend, and relegating Germany to the back of the pack during of the new year.”

It is in this context that the markets also took note of the minutes of the last meeting of the European Central Bank, two days after that of the American Federal Reserve.

In its document, the ECB wanted to recall “the considerable uncertainty surrounding the evolution of the economic and inflation outlook during a phase of economic slowdown”, while emphasizing that the pause on rates in October “was not a message of convenience”, sent to the market.

As for the (rare) stocks in sight, LDC finished up 3.9%, the markets having appreciated the latest publication which was higher than the poultry producer’s expectations.

On the agenda this Friday, to follow in priority the IFO business climate index in Germany at 10:00 a.m. and the manufacturing and services PMI at 3:45 p.m. across the Atlantic, in first estimates for the current month.

KEY GRAPHIC ELEMENTS

The 7,200 points, the technical issue of last week, were exceeded, with the weekly candle closing at its peaks. The flagship Parisian index is now entering a phase of digesting its gains, in the form of a consolidation whose graphic pattern is still being determined, after four stars doji of rank.

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 a crossing of 7406.00 points would revive the buying tension. While a break of 7000.00 points would restart the selling pressure.

Hourly graph

Daily Data Chart