CAC 40: Apple share reaction and NFP report on employment on the menu

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Complicated session yesterday on the Paris Stock Exchange, whose flagship index was weighed down by BNP-Paribas (-9.21%). The French establishment published results below expectations in the fourth quarter, due to revenues disappointing than expectations coupled with higher costs. The rue d’Antin bank also lowered its objectives for 2025.

In this very bad wake, the other banking files in the index suffered significant declines, like Crédit Agricole (-2.81%) and Société Générale.

Furthermore, Dassault Systèmes sank (-10.36%), after having delivered a disappointing quarterly report. The poor performance of licenses and lackluster growth in life sciences are highlighted by analysts.

Results below expectations for Sanofi (-4.10%). The pharmaceutical group published this Tuesday a net result of activities lower than expectations and announced the departure of its financial director.

We also had to digest the outcome, on Wednesday, of the meeting of the Fed’s Monetary Policy Committee which definitively dashed the hopes of the most optimistic operators still considering a first rate cut in March.

“The president of the Fed confirmed that monetary policy would be eased in 2024, specifying however that the gesture did not seem imminent. A few weeks ago, the markets saw a first rate cut in March as a virtual certainty, now, it would rather be May”, summarize the economists at Oddo BHF.

Fed officials have “made clear they need to see more progress on inflation before cutting borrowing costs, leaving little hope for a rate cut next March.” agrees John Plassard of Mirabaud. “Mars is no longer the reference scenario,” concludes Bank of America.

The Fed remains attentive to tensions on employment. Employment is the subject of discussion throughout the week, with today’s highlight being the federal NFP (Non Farm Payrolls) report, on the health of private employment for the month of January. Note the relative good news on Wednesday with the foretaste of the investigation by the private human resources firm ADP (Automatic Data Processing) with job creations (107,000) very clearly below the target. Immediately, operators were able to take note yesterday of weekly registrations for unemployment benefits, up very slightly to 224,000 new units.

On the other side of the Atlantic, the main equity indices ended Thursday’s session in the green, like the Dow Jones (+0.97%) and the Nasdaq Composite (+1.30%). . Note the reassuring publications from Amazon and Meta, in post-market form, while Apple’s quarterly copy disappointed, despite a return to growth in Q4.

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 $1.0880. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $74.10.

On the agenda this Friday at 2:30 p.m., to follow in priority the NFP (Non Farm Payrolls) report, on American private employment in January.

Here are the corresponding consensuses:

Unemployment rate: slight increase to 3.8% of the active population Average hourly wage: +0.3% compared to +0.4% in December Job creation, private sector excluding agriculture: 187,000.

Also to follow, at 4:00 p.m., the American consumer confidence index (U-Mich) in revised data.

KEY GRAPHIC ELEMENTS

The bevel (wedge) which had 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.

In the immediate future, taking a breather from the lessons is the preferred option during this last part of the week. With a close eye on the stocks that have climbed the most since mid-January.

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