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The Parisian market continued its lateral transition on Friday, below the recent zeniths for the CAC 40 (+0.09% to 7,934 points), in a very impressive form of resistance to the temptations of taking profits, however great. The American inflation figures, in the sense of core PCE, are fully digested.

On this side of the Atlantic, inflation in the euro zone slowed in February but a little less than expected. It rose to 2.6% over one year compared to 2.8% in January. But the consensus established by Reuters was 2.5%.

“The level of 2% to be reached is complicated and uncertain” for Emmanuel Auboyneau, Amplegest partner. “In addition to a possible rise in raw materials boosted by economic growth, it is above all wages which are the key variable. After a lull of several months, they have recently resumed the upward trend, which is consistent with the strength of the job market. Furthermore, rents which constitute 30% of the price index have stabilized but remain subject to the structural shortage of housing in the United States.

The CME’s FedWatch tool puts the probability of a rate cut on May 1 at the end of the FOMC at 25.8%.

M Auboyneau remains convinced “that 2024 will be the year when the rate cut begins, but in a moderate way and only from the second half of the year.”

To be complete in terms of macroeconomic statistics, the ISM manufacturing PMI disappointed, coming in at 47.8 points, against a target of 49.5. But like Bad news is good news in the sense of a euphoric market, the main equity indices across the Atlantic have reached new zeniths, like the Dow Jones +0.23% at 39,087 points, or the Nasdaq Composite ( +1.14% to 16,274 points). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.80% to 5,137 points.

On the value side, Saint-Gobain lost 3.65%. The company generated a record margin and cash in 2023. But revenues are a tad lower than expected and the group indicated during a conference call that volumes would continue to decline in 2024. In a note published this Friday, the company Stifel bank recommends buying the stock in case of signs of weakness. Vallourec lost 1.9% after publishing its results and communicating prospects deemed “cautious” by an analyst for 2024. Valeo for its part lost 2% while the group lowered its objectives for 2025, both in in terms of revenues and margins.

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 $1.0840. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $79.50.

On the agenda this Monday, to follow as a priority the Sentix investor confidence index in the Euro Zone at 10:00 a.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, beyond 8,000 psychological points. Ultimately, breathing towards the orange trend line (mm50d) is the preferred option.

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.

News Bulletin 247 advice

CAC 40
Neutral
Resistance(s):
8000.00
Support(s):
7700.00 / 7406.00 / 7200.00

Hourly graph

Daily Data Chart

CAC 40: Growing temptations to take profits (©ProRealTime.com)