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In the absence of American benchmarks at the end of last week (Thanksgiving Thursday and shortened session on Wall Street) the next day, the CAC 40 continued with upward momentum, in mechanically starving volumes. Operators continued to convince themselves, in the light of the latest statistical publications, of an ideal Goldilocks type scenario, “this tale popularized by the Brothers Grimm in the 18th century”, as Christopher Dembik, advisor, explains. in investment strategy at Pictet AM. “In its most widespread version, a young girl with blond hair (“Goldilocks”) enters a house inhabited by a family of three bears who have gone away. She then tastes the three bowls of porridge, preferring the one of the bear, neither too hot like that of the father, nor too cold like that of the mother. In economics, the “goldilocks” scenario refers to an optimal situation where growth is modest, but very real, and moderate inflation. This is now the scenario that dominates the financial markets after the publication of inflation in the United States.”
On the statistical side, the IFO business climate index in Germany showed a very slight increase at 87.3, with no significant deviation from the consensus. Published the day before, the PMIs (Purchasing Managers’ Index) in Europe, as first estimates for the current month, without significantly deviating 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.”
Across the Atlantic, equivalent indicators have supported the scenario of a soft landing for the American economy.
In terms of values, there is very little to get your teeth into. Laurent-Perrier finished up 1.7% after its half-year accounts, supported by an increase in bottle prices. The group still warns that the second part of the year will be more complicated. Very good session for ELIOR (+5.27%) which confirms its good dispositions since October 26.
On the other side of the Atlantic, Wall Street reopened for a shortened session on Friday, the day after Thanksgiving, in the absence of a large segment of investors. The Dow Jones managed to gain 0.33% to 35,390 points and the Nasdaq Composite contracted slightly, by 0.11% to 14,250 points. The S&P500 once again played the averages, ending on a stable note at 4,560 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 $1.0960. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $74.90.
On the agenda this Monday, a speech by Ms. Lagarde, President of the ECB at 3:00 p.m. and sales of new homes in the United States at 4:00 p.m.
KEY GRAPHIC ELEMENTS
The 7,200 points, unambiguously exceeded on November 17 after pullback, are switched to intermediate support, above which the chart situation remains solid. At this stage of the rally nevertheless, by no less than 500 points in one month, a phase of one-off profit taking, on certain issues, certain sectors, certain styles of values, and for a handful of sessions,
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 7406.00 points.
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