(News Bulletin 247) – The CAC 40 index ended the week down 0.77% on Friday at 6,951 points, in volumes equivalent to the day before, this time with pronounced releases on the “Value” ray on the side. Among the biggest drops on Friday in compartment A are: Elior (-4.46% to 4.758 euros), Icade (-4.74% to 58.30 euros), Faurecia (-4.94% to 38.65 euros ), Alstom (-4.95% to 27.09 euros), or even Stellantis (-5.32% to 16.456 euros). Across the Atlantic, same dichotomy in the styles of values, in the wake of the report on employment (NFP), which did not support the thesis of a stronger tightening than anticipated, for the moment, of the monetary policy .
The unemployment rate has – it is a surprise – slightly increased to 4% of the active population, but job creations have exploded expectations, while earlier in the week, the ADP cabinet survey showed a balance negative. Such a gap between ADP and NFP is rare, even if the methodologies are different. The Bureau of Labor Statistics has therefore just published 467,000 job creations, literally exploding the consensus (110,000). “Job growth continued in leisure, events, business services, retail trade, and transportation and warehousing,” the latest report read.
As a reminder, Thursday marked the end of a new Board of Governors of the powerful Frankfurt monetary institution.
Under pressure after the publication, on Wednesday, of an unprecedented surge in inflation in the euro zone (+5.1% over one year in December, + 2.3% corrected for the corrected prices of energy, alcohol and tobacco), Christine Lagarde acknowledged that the rise in consumer prices was stronger than expected, also admitting that the risks were on the upside, while repeating that she was counting on a slowdown in here the end of the year. The ECB President also assured that the institution’s Governing Council would not take a hasty decision on monetary policy but did not reaffirm that a rate hike this year was “very unlikely”, as she had said at the last meeting.
“The ECB has taken a further step by estimating that inflation was higher than expected and that it could remain so for longer than expected, at least for several months”, for Vincent Manuel, Chief Investment Officer at Indosuez Wealth Management . “What has also changed”, he continues, “is the perception of the labor market, which should at some point generate upward pressure on the level of inflation, but to a lesser extent than ‘in the United States or the United Kingdom. With a record unemployment rate of 7% and a participation rate back to pre-pandemic levels, the labor market is perceived to be very strong and could lead to upward pressure on wages, which the ECB does not yet see. This can be interpreted as a critical point that will have an impact on ECB policy in the future.”
To be complete on the chapter of values, Orpea (-12.44% to 33.71 euros), and Korian (-16.81% to 17.57 euros) in its wake, in view of the next revelations within the framework of the investigative program of the public service Cash Investigation.
Across the Atlantic, if the technological heavyweights managed to react (+1.58% to 14,098 points for the Nasdaq Composite), the Dow Jones remained stable at the close at 35,089 points. The S&P 500, benchmark barometer of risk appetite in the eyes of fund managers, nibbling 0.52% to 4,500 points all round.
A point on the other risky asset classes: around 08:00 this morning on the foreign exchange market, the single currency was trading at a level close to $1.1450. A barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $90.90.
To follow on the agenda this Monday, to follow in priority the Sentix index of investor confidence in the Euro Zone at 10.30 am and an intervention by C. Lagarde at 4.45 pm.
KEY GRAPHIC ELEMENTS
An oblique line of support gave way on Monday under the sectorally federated assaults of the selling camp, in a very high level of participation. This release of selling energy at this stage, in a single session (24/01), constitutes a major technical fact which characterizes the hypersensitivity of a market which is increasingly and continuously questioning the levels of valuation of the shares. . The entry into the bear market is not formally characterized, but the situation calls for the greatest vigilance under this slant. She was reinstated at the very end of the week. We put her under close surveillance.
In the immediate future, plotting a wedge in hourly data is not very engaging. The three-color flagship index came out on Thursday, from below, in accelerating volumes.
FORECAST
In view of the key graphic 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 trading below the resistance at 7115.00 points.
Hourly data chart
Chart in daily data
©2022 News Bulletin 247
I am currently a news writer for News Bulletin247 where I mostly cover sports news. I have always been interested in writing and it is something I am very passionate about. In my spare time, I enjoy reading and spending time with my family and friends.
