CAC 40: Prices breathing after a stack of records

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After a prosperous week, marked by a stack of historic records, galvanized by the breathtaking quarterly copy from NVidia, the CAC 40 should begin the week in a consolidation “mode”. Over this record week as a whole, the Parisian index therefore increased by 2.54%. This is the second best weekly performance of the year for the CAC 40 since the week of January 22 (+3.6%).

As a reminder, In the fourth quarter (ended at the end of January 2024), Nvidia once again repeated the feat of exploding analysts’ expectations by revealing revenues of $22.1 billion, compared to $6.05 billion in revenues generated during from the same period last year. The increase is therefore dizzying, since its sales have soared by 265% over one year.. And yet, expectations were already very high, the market consensus was targeting a turnover of 20.4 billion dollars over the period. It is the demand for AI that has sustained the activity of the group, historically present in graphics chips, so high. This publication reveals the power of this demand, this need for chips with high computing performance. AI is definitely a market megatrend.

Thanks to this quality publication, Nvidia saw its capitalization increase by an additional $277 billion, in Thursday’s session alone. This is the largest capitalization gain on Wall Street in one day, erasing the precedent of Meta which saw its stock market value jump by $196 billion in early February.

On the macroeconomic statistical side, no surprises regarding the publication this morning of the IFO business climate index in Germany, perfectly in line with market expectations at 85.5 points. The tool for measuring the economic cycle continues to be positioned as “crisis” in their matrix. The day before, operators took note of the very first estimates of PMI activity indicators for the Euro Zone in February. If industry disappoints (46.1), services surprise positively, regaining 50 points, the threshold which by construction separates an expansion from a contraction of the sector considered.

On Friday, in the values ​​chapter, Fnac Darty jumped 7.5%, investors appreciating the free operating cash flow which clearly exceeded expectations in 2023, despite a difficult year for consumption. Bouygues, on the other hand, lost 1.6%, while the mobile operator of the Bouygues conglomerate is negotiating the takeover of La Poste Telecom for 950 million euros.

On the other side of the Atlantic, the main equity indices ended Friday’s session in disorganized order, with the Dow Jones managing to gain 0.16% to 39,131 points, and the Nasdaq Composite contracting by 0.28 % at 15,996 points, allowing itself a slight recovery below 16,000 points after a prosperous week. Dead calm at the close on the S&P500 at 5,088 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 $1.0830. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $78.00.

On the agenda this Monday, to follow in priority the sales of new homes in the United States at 4:00 p.m. and a speech by Ms. Lagarde, President of the ECB, at 5:00 p.m.

KEY GRAPHIC ELEMENTS

The index crossed 7,700 points on gap and entered an unexplored navigation zone between 7,700 and the symbolic threshold of 8,000 points. The oscillatory RSI (relative strength index) is recovering, suggesting a final bullish surge before consolidation that can be broken down into several legs. We will carefully monitor the possible formation of a gap of shortness of breath or exhaustion in the next sessions.

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 8000.00 points would revive the buying tension. While a break of 7700.00 points would restart the selling pressure.

Hourly graph

Daily Data Chart