CAC 40: Meeting Wednesday with J Powell

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For the second session in a row on Friday, the CAC index traced, in contact with the upper Bollinger band, a candle where the low points, the opening level and the closing level merge. A running out of steam in the buying camp is confirmed, without calling into question at this stage the power of the trend fundamental bullishness. The flagship French index ended Friday’s session on a flat note (+0.04%), with the good shape of the automotive and banking sectors offsetting the difficulties of tech and luxury.

In the end, it was a good week, with investors easily digesting the latest US inflation figures. These latest benchmarks, in the sense of the CPI, although beyond expectations, did not undermine the trend, because it was necessary to read between the lines: the rent component was fully reassuring. Producer prices also marked the week. These leading inflation indicators showed a monthly increase of 0.6%, well beyond expectations (+0.3%), excluding food and energy. “This is an important publication, because several components of the producer price index feed into the PCE inflation measure, which is the one that the Fed officially targets,” underlines Deutsche Bank.

In terms of statistics on Friday, the University of Michigan consumer confidence index unexpectedly contracted to 74.5 points in March in preliminary data, where a slight increase to 77.1 points was expected. by the consensus after 76.9 points in February. American industrial production for the month of February increased slightly by 0.1%, which is in line with expectations.

On the value side, fell 17.5%, after shutting down a production site in Italy and suspending its objectives for 2024. ID Logistics lost 4.3% while Stifel lowered its advice to “hold” on the value, judging that all the good news is now integrated into the price. On the rise side, Exclusive Networks further increased by 4.4% the day after an increase of 8.9%, while Permira, its majority British shareholder since 2018, would consider a takeover of the French cybersecurity specialist, reported Reuters on Thursday citing sources familiar with the matter.

On the other side of the Atlantic, the main equity indices ended Friday’s session in the red, with a marked Beta effect on tech, unsurprisingly. Thus, the Dow Jones fell by 0.49% to 38,714 points and the Nasdaq Composite lost 0.96% to 15,973 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 $1.0890. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $81.00.

On the agenda this Monday, to follow as a priority the final consumer price data for the month of February.

Let us continue to point out that since Monday, Wall Street opens at 2:30 p.m. (Paris time), and not 3:30 p.m., quite simply because the East Coast of the United States has already switched to summer time, and we have not yet. The big statistical meetings, often scheduled for 2:30 p.m., are therefore scheduled in the interval at 1:30 p.m.

KEY GRAPHIC ELEMENTS

Thanks to the crossing volumes, the bullish extension since Tuesday and the sectoral federation, we can swing the 8,000 psychological points into support, against which in the long term, a pullback (graphic rejection of confirmation) is not excluded. Now is the time to take a breather from the lessons. As we specified in the preamble, for the second session in a row on Friday, the CAC index traced, in contact with the upper Bollinger band, a candle where the low points, the opening level and the closing level merge. .

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 8220.00 points would revive the buying tension. While a break of 8000.00 points would restart the selling pressure.

Hourly graph

Daily Data Chart