CAC 40: Approaching major statistical and monetary events

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After Friday’s remarkable session, the CAC 40 paused at its historic highs on Monday, in the absence of sharp statistical benchmarks. The agenda will be denser this Tuesday with, among other celebrations, the American consumer confidence index (Conference Board) and new job offers (JOLTS). Enough to provide a little additional food for thought to the Fed which concludes its monetary policy meeting tomorrow.

The markets are waiting for details, or at least clues, on the timetable for rate cuts. François Rimeu, senior strategist at La Française AM, believes that “allusion to the timetable for cuts will be made at this meeting. Jerome Powell will likely maintain his dovish rhetoric that surprised markets during the December 2023 press conference, as the Fed is increasingly confident that inflation is sustainably approaching the PCE inflation target of 2%. However, it will remain cautious about the scale of reductions in 2024 by reaffirming the 75 point rate cut core, as predicted in the December 2023 projections, although the Fed will make its monetary policy decisions based on the data.”

Last week, the ECB convened its Governing Council. A “first stab in the water for the ECB”, for Thomas Giudici, head of bond management at Auris Gestion. Before the interventions of the Fed and the BoE this week, the European institution therefore kept rates unchanged for the third consecutive meeting, as expected. If the ECB therefore remains in the status quo and stays the course of recent months, we nevertheless feel an ounce of dovish inflection emerging in Christine Lagarde’s speech. It is therefore only a matter of months before the first cuts in key rates are made, most likely at the April or June meeting.

On the stock side, Eutelsat plunged 14.5% following the lowering of its forecasts for the current financial year due to delays at OneWeb.

SMCP limited its decline to 1.9% after also issuing a profit warning.

Carmat lost 3.8% while the designer of the artificial heart Aeson announced on Monday that it had finalized its appeal to the market, raising, in net, 14.9 million euros, giving it only 3 months of respite.

Renault closes with a slight drop of 0.15%, the diamond brand announced this Monday after the close of the markets, the abandonment of the Ampere IPO project.

On the other side of the Atlantic, the main equity indices ended Monday’s session in the green, like the Dow Jones (+0.59% to 38,333 points) and the Nasdaq Composite (+1 .12% to 15,628 points). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.76% to 4,927 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 $1.0830. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $77.10.

On the agenda this Tuesday, to follow in priority, on the American side, the S&P real estate price index at 3:00 p.m., the consumer confidence index (Conference Board) and new job offers (JOLTS) at 4:00 p.m.

KEY GRAPHIC ELEMENTS

The wedge which predominated until then was broken in its momentum by the formation of a large gap and an increase in gains during the session itself on Friday January 26. A major challenge now awaits the CAC: the creation of a series of absolute records. To do this, the participation of the luxury and spirits sectors alone would be insufficient.

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 crossing 7695.00 points would revive the buying tension. While a break of 7406.00 points would restart the selling pressure.

Hourly graph

Daily Data Chart