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The flagship Parisian index has, in timid trading volumes, and in the absence of benchmarks from the Japanese and Chinese stock markets, returned to its annual high points, encouraged by the steady advance of American technology stocks. The market reserves a good part of its initiatives for today’s session, which will be marked by the publication of the ZEW index of confidence in the German economy, but especially by the consumer price indices across the Atlantic.
Regarding American inflation, prices are expected to increase by 2.9% year-on-year, food and energy included. See you tomorrow at 2:30 p.m. to read the publication.
“The Fed is still at 5.25%-5.50% with a lack of visibility on the date of the first rate cut as well as the pace of rate cuts in 2024. The market continues to anticipate 5 rate cuts from the Fed this year, via Fed Futures Funds, while the Fed in its December projections anticipated only 3 cuts of 25 basis points”, notes Alexandre Baradez, market analyst for IG France.
“Several members of the Fed who have spoken in recent weeks also lean towards this scenario of 3 rate cuts in 2024 and do not give a feeling of imminence for the first cut.”
Note on the values side, the small rebound of L’Oréal (+2.4%), which benefits from cheap buybacks after being sanctioned on Friday (-7.6%), due to disappointing growth in the fourth quarter .
The specialist in digital music distribution Believe sees its action suspended, with a final price of 12.40 euros on Friday evening. The company indicated on Monday that it had received a buyout offer at a price of 15 euros per share, an offer which came jointly from funds and the CEO, Denis Ladegaillerie.
Note that on the smaller capitalization side, IDSud resumed trading on Friday at the very end of the session and is therefore trading on Monday. The group has launched a public share buyback offer and is offering its holders, rather than cold hard cash, FDJ shares.
To follow this week the rest of the quarterly ball of the large groups, with an avalanche on Thursday (Stellantis, Airbus, Renault, Schneider Electric, Pernod Ricard, Orange…).
On the other side of the Atlantic, the main equity indices ended Monday’s session in disorganized order, with the Dow Jones gaining 0.32% and the Nasdaq Composite dropping 0.30%. The S&P500, a benchmark index for risk appetite in the eyes of fund managers, ended on a flat note, preserving the highly symbolic threshold of 5,000 points.
An update on other risky asset classes: around 8:00 this morning on the foreign exchange market, the single currency was trading at a level close to $1.0780. A barrel of WTI, one of the barometers of risk appetite on the financial markets, was trading around $77.20.
On the agenda this Tuesday, follow the German ZEW at 11:00 a.m. and the CPI (consumer price indices) in the United States at 2:30 p.m.
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.
Furthermore, a resistance zone is gradually being built on the historic highs, in the form of a double top.
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.
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