CAC 40: Profit taking is very targeted

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The CAC 40 (-0.21% to 7,250 points Tuesday) has entered a phase of limited, partial, one-off and targeted profit-taking. Interestingly, in addition to the underperformance compared to the DAX (+0.16%), only 16 stocks out of the 40 included in the index finished in the red. Among this minority, the representatives of luxury, LVMH (-1.84%), Hermès (-2.01%) and Kering (-2.58%). In a note devoted to the sector and published this Tuesday, the HSBC bank reported a certain caution for next year. Entitled “Goodbye stellar growth”, the establishment explains that it expects growth of 8% for all luxury goods next year, after 35% in 2021, 15% in 2022. and 11% in 2023.

The market remained attentive to the interventions of members of the American Federal Reserve (Fed) which will hold its next monetary policy meeting on December 12 and 13.

Governor Christopher Waller said he was “increasingly confident” that the current level of the central bank’s key rates could allow inflation to return to around 2%, according to comments reported by CNBC. The president of the Chicago Fed, Austan Golsbee, simply judged that inflation was falling without falling within the target desired by the American institution, reports Bloomberg.

Operators will have to deal with a very busy macroeconomic program this week, not necessarily in quantity but in “quality”: the week’s agenda includes indicators with high potential impact in the event of a deviation from the consensus. Kick-off yesterday with, at 4:00 p.m. (Paris time), the consumer confidence index (Conference Board). An indicator with a strong impact, in an economy where traditionally, the creation of national wealth is very dependent on the quality of domestic consumption. It came out slightly higher, exceeding expectations, at 102.

It continues this Wednesday with US GDP data, preliminary consumer price data in November in the Euro Zone on Thursday, as well as PCE prices, the Fed’s preferred measure in its assessment of price dynamics. Enough to gauge even more precisely the credibility of a Goldilocks type scenario, an ideal scenario where measured and controlled inflation would coexist with weak but continuous growth.

To be complete on the value side, dropped almost 9% while the group controlled by the Guillemot family issued bonds convertible or exchangeable into new or existing shares in the amount of 495 million euros. The market welcomes the operation since it involves potential dilution for shareholders. Atos continued its decline and lost 6.6% after S&P lowered its credit rating to “BB-”. The group declared for its part that it had “the necessary liquidity to meet its financial obligations over the next twelve months”.

On the other side of the Atlantic, the main equity indices ended Tuesday’s session in positive territory, like the Dow Jones (+0.24% to 35,416 points) or the Nasdaq Composite (+0 .29% at 14,281 points). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.10% to 4,554 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 $1.0990. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $76.50.

On the agenda this Wednesday, to follow in priority the preliminary data of American GDP for Q4 at 2:30 p.m.

KEY GRAPHIC ELEMENTS

The 7,200 points, unambiguously exceeded on November 17 after pullback, moved to intermediate support, above which the chart situation remains solid. At this stage of the rally nevertheless, of no less than 500 points in a month, a phase of occasional profit-taking, on certain issues, certain sectors, certain styles of values, and for a handful of sessions, is the preferred option.

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.

Hourly graph

Daily Data Chart