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After an excellent month of December on the stock market, against a backdrop of hope for a Goldilocks-type macroeconomic scenario, the Parisian market is entering December on a legitimately less offensive note.
“In economics, the “Goldilocks” scenario refers to an optimal situation where growth is modest, but very real, and inflation is moderate,” recalls Christopher Dembik, investment strategy advisor at Pictet AM.
The term is borrowed from a character in a popular tale, Goldilocks and the Three Bears, where a little girl discovers an empty house in the heart of the forest. Attracted by the tempting smell of bowls of hot chocolate (or porridge, depending on the version!), the little girl indulges in tasting the 3 bowls lined up on the table: that of Mama Bear, Papa Bear, and the little one. bear cub. His preference is for the latter, neither too hot nor too cold…
“The market consensus is for a perfect scenario, in which the slowdown in inflation allows a reduction in key rates before mid-2024 without growth slowing down significantly. These expectations may last for a few more weeks given that the last macroeconomic data points in this direction. But the risk of a more marked slowdown (our scenario) or that of more persistent inflation could quickly weigh on risky assets”, warns Xavier Chapard (LBPAM).
As a reminder, on Thursday, the dynamic of slowing inflation emerged even more significant than expected. Excluding food, energy, alcohol and tobacco (elements considered volatile), prices increased at an annualized rate of 3.6% in November, compared to a target of 3.9% and a month of October of 4.2%! A very significant slowdown which should bring a little flexibility to the ECB’s monetary policy. Across the Atlantic, the PCE (Personal Consumption Expenditures), the preferred gauge of the American Federal Reserve (Fed) for measuring inflation, increased by 3% over one year in November, compared to 3.4% last month. The “core” index, excluding energy and food prices, increased by 3.5%, a figure in line with the consensus of economists surveyed by the Wall Street Journal.
On the values side, Wordline dominated the debates (+5.87%) on the CAC after the sign of interest shown by Crédit Agricole for an equity stake, according to information from the Bloomberg agency. Societe Generale fell 0.8%, penalized by a lowering of recommendations from Goldman Sachs to “sell”. Along the same lines, LVMH lost 0.5% while Morgan Stanley went from “overweight” to “online weighting” on the stock.
On the other side of the Atlantic, the main equity indices ended Friday’s session in the green, like the Dow Jones (+0.82% to 36,245 points) or the Nasdaq Composite (+0 .55% at 14,305 points). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.59% to 4,594 points.
An update on other risky asset classes: around 8 a.m. this morning on the foreign exchange market, the single currency was trading at a level close to $1.0860. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $73.40.
On the agenda this Monday, the Sentix investor confidence index in the Euro Zone at 10:30 a.m., a speech from Ms. Lagarde, President of the ECB at 3:00 p.m. and orders to American industry at 4:00 p.m.
KEY GRAPHIC ELEMENTS
The 7,200 points, unambiguously exceeded on November 17 after pullbackare switched to intermediate support, above which the chart situation remains solid.
The attraction effect of the bearish gap of September 18 (upper limit at 7,366 points) will begin to be felt. It was only partially filled on Friday.
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 7200.00 points would restart the selling pressure.
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