CAC 40: A healthy episode of consolidation

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After a successful week, the CAC 40 activated “consolidation” mode, awaiting the PCE prices, which will be published on Thursday. For this preferred measure of the Fed in its assessment of inflation, “the consensus stands at +0.4% for PCE “core” inflation in monthly variation, which would be the strongest progression observed since February 2023. On the other hand, the consensus is +2.8% in annual data, which would mark a continuation of the improvement towards the Fed’s objective of 2%, knowing that the figure stood at 2.9% in January”, notes Alexandre Baradez (IG France). Note that the core PCE (excluding food and energy), due to its calculation methodology different from the CPI, is indeed the Fed’s preferred inflationary gauge, the one which influences it the most in the construction of its monetary strategy.

In terms of statistics on Monday, almost nothing to sink your teeth into. Let us still mention the sales of new homes in the United States, which failed to reach the target in January, at 661,000 units. All eyes are already on the publication this Tuesday of the consumer confidence index (Conference Board) and this Thursday, as we have just mentioned, of the PCE prices

On the value side, Casino gained 15.61% after the confirmation, by the Commercial Court, of the validation of the rescue plan led by Czech billionaire Daniel Kretinsky.

On the other side of the Atlantic, the main equity indices closed slightly in the red, like the Dow Jones (-0.16% to 39,069 points) and the Nasdaq Composite (-0.13% at 15,976 points). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, lost 0.38% to 5,069 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 $1.0850. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $77.60.

On the agenda this Tuesday, priority will be given to the American consumer confidence index (Conference Board) at 4:00 p.m. To follow a little earlier in the day orders for durable goods at 2:30 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