CAC 40: In search of catalysts under the zeniths

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The CAC 40 index experienced a session without much relief on Wednesday, contracting by 0.36% to 7,611 points, below its historic peaks, weighed down by TotalEnergies whose annual copy, although historic in terms of profitability, does not not fully convinced (see below).

In terms of statistics, there was little to sink your teeth into yesterday. Note the monthly deficit (December) of the French trade balance which increased to -6.8 billion euros. Basically, operators are still digesting the publication, at the end of last week, of a very solid federal report on employment. So big that it single-handedly closed the door to the last hopes of a first rate cut next month.

It is a feeling of restraint that predominates, against a backdrop of questions about a possible return of the specter of a crisis of American regional banks. Doubts are indeed justified as New York Community Bancorp (NYCB), an American regional bank, shows worrying signs of weakness…

If this banking establishment means nothing to ordinary people, it was nevertheless a major player in the rescue of Signature Bank, one of the banks which had been swept away by the banking crisis which gave the financial markets a cold sweat in March 2023. And this time, it is the savior who threatens the precarious balance of a sector bearing the scars of this crisis.

On the stock side, it was TotalEnergies (-3.17%) which caught the attention of the markets yesterday, by publishing record profits before the market.

But the group benefited from a favorable basis of comparison since the 2022 financial year was weighed down by heavy exceptional charges of nearly $15 billion linked to Russia. Ultimately, its fourth quarter results were slightly below expectations, while its announcements on shareholder distribution (dividends, share buybacks) turned out to be just in line. Enough to encourage profit-taking, while the stock had gained 1.8% the day before, in the wake of the excellent results of its British comparable BP.

On the other side of the Atlantic, the main equity indices ended Wednesday’s session in the green. New historic record for the S&P500 (+0.82%), driven by the continuation of the quarterly progress. The Eli Liily & Co laboratory, benefiting from the sales of its anti-obesity treatment, is a major illustration of this. The banking-rich Dow Jones rose less (+0.40%) while the Nasdaq Composite gained 0.95%.

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 $1.0780. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $74.20.

On the agenda this Thursday, to follow in priority the ECB economic bulletin at 11:00 a.m. and the weekly registrations for unemployment benefits in the United States at 2:30 p.m. They are expected at 221,000, a level still close to 200,000, reflecting tensions on the job market.

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. (LVMH, Hermès, Teleperformance, CapGemini, Safran and Publicis).

A first divergence between price and RSI, between the last two high points (14/12 and 31/01) becomes clear.

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